Is a Child Never Too Young to Save Money?
Actually, yes. Children can be taught to save at an early age. And you can help. Here’s how:
Be the example.
If you value money, your kids are more likely to do the same. Show them how to use money wisely through your own purchases and small financial decisions. If there’s something you want but can’t afford, let them know that you, too, can say no to yourself.
Reward, don’t bribe.
Bribing is a lot easier, but it will have negative repercussions later on, say in their teen years. Instead, reward for good behavior or school performance. Use a point system if you think it’s appropriate. And when you promise to give something, don’t fail unless you have a pretty good reason. Otherwise, your credibility factor goes down by a couple of points.
Deal with the bank.
It’s never too early to let kids know what banks do. Open a savings account for them and have them deposit money they’ve accumulated. Explain how interests work and if they’re old enough, teach them how to calculate. They’ll be more interested if they knew that their money can grow.
Splitting 50-50.
For cash gifts that are considerably bigger than the usual amounts they receive, young kids can be taught to split them 50-50. Place one half in their savings account and let them do what they want with the other half.
Putting aside a third.
The weekly allowance is always a good start to teach kids how to save money. About a third of this may be set aside as savings. So from a weekly allowance of $10, for example, a child can put about $3.30 in her piggy bank.
Make it fun.
At an early age, children should view saving money as a fun activity that has a useful purpose. Don’t make them take it too seriously. Show them why they should save but don’t force or nag them into submission. If you take away the joy in saving money, your kids will hate it with a vengeance.
Via MidSouthNews
image from kidspriorityone.org
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