Help kids save money with these teaching tips
If you want to teach kids money management and the importance of saving, it doesn’t hurt to start early. Research shows that children grasp how money works as early as age 3. By age 7, they begin to hone money habits. Plus, many adults say they would have benefited from early instruction in money matters. In a recent survey, 1 in 4 U.S. adults with children under 18 said their parents provided no money lessons as a child.
This is why teaching kids to save at an early age will pay large dividends later in life. Small lessons add up to a habit of saving for much bigger things later in life. Whether your kids get money as a gift or by earning it through household chores, it’s a good idea to teach them how to save it. While there are plenty of ways to do this, here are some fun ways to begin.
Use a transparent piggy bank for teaching kids about budgeting
Many kids like to participate in a long tradition—saving coins (and maybe cash) in a piggy bank. To give them a true visual of saving and spending, choose a clear piggy bank or jar. When children see money accumulate or depreciate, they better understand the concept of controlling their finances.
Consider pairing a piggy bank with a chart to track benchmarks. As children grow their piggy banks, they can fill the chart with fun, colorful shapes as they reach savings goals. Amp up the fun by offering prizes or more money (for their banks, of course) when they meet their goals.
Gamify financial lessons
Children love to play games, so consider teaching kids about budgeting and finance using popular board or electronic games. Playing classic board games like Monopoly Junior® or The Game of Life® can teach children about banks, taxes and making purchases.
If you’d prefer to go digital, you have many options. Fun, interactive apps show children how interest grows and a savings account works. Cash Puzzler®—for ages 3 to 6—teaches kids how to recognize money. An image of a $1, $5, $10, $20, or $100 bill is cut up into small squares. Players must reassemble it as they learn to recognize the denominations.
Peter Pig’s Money Counter®, for ages 5 to 8, teaches kids how to identify coins and add up their values. They earn virtual money for playing, which they can choose to save or spend in a virtual store.
The kids’ section of the U.S. Mint website also includes several games that teach children about the evolution of American currency and managing money.
Give children a taste of the real deal
When children reach their savings goal, it’s time to go shopping. Encourage them to develop a budget first. As they eye a certain toy or item, have them compare different products. Ask them: What is the best product for the price?
Let children make their own decisions—and mistakes. Remember that wasted money or impulse buying are teachable moments. Discuss the purchase with your child by asking whether the purchase was worthwhile or could they have saved up for something else.
Teach kids about money management with a youth savings account
When your child is old enough, open a savings account. Greater Alliance offers a Youth & Kids Account to help kids understand long-term saving and how accounts work. With our Don’t Touch Account, they can set money aside for special purchases, like a bike or electronics.
Parents can open a youth account as soon as their child receives a social security number. They remain joint owners of it until the child reaches 21. The account comes with several benefits, including a regular savings rate, 1.00% APY on the first $1,000, a free ATM card and a $10 gift card every year on the date the account was opened.
Consider setting a savings goal for the account. When your child reaches it, reward them by matching some or all of their savings. To get started teaching kids money management with a savings account, contact us or stop in at one of our branches.