When it comes to learning concepts like saving, visuals and physical interaction are important, especially for young children. With that in mind, here are a few ideas to teach your child how to save:
Use different envelopes/jars
You may be familiar with the envelope budgeting system for your own money, but this can also work for children. On either envelopes or jars have your child draw pictures of what he or she wants. You may also want to help your child understand that some items will take longer than others to save for.
For example, the short-term savings container might have a picture of a specific toy, while the long-term container might have a picture of a trip to the amusement park. Teach your child to set aside money for short-term and long-term goals, and have another container or envelope for spending on everyday items.
Make a savings goal chart
Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. You can represent each week with a box and your child can put a sticker in that box once the money from that week’s allowance is set aside. This way, the child could visualise getting closer to their goal.
Offer rewards for saving money
Consider rewarding your child for saving his or her money. Much like my credit union, which offers t-shirts and other prizes, you can offer prizes to your children.
For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves. Try stickers, an extra half hour of video games, toys, or whatever motivates your child.
Set a good example
One of the best things you can do is let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is normal. Plus, since most young children want to be like their parents, seeing you do it will provide them with money lessons that further inspire them to save.
Match your child’s contributions
A “savings match” can be a great way to encourage your child to save extra money. You can set an amount which your children has to set aside from their allowance, or you can choose to match whatever amount they choose to save.
