Want to teach kids how to save? Then talk about what they want to buy! OK sounds like a pretty obvious disconnect, not so, as soon as you get them describing their wants, the conversation about SAVING has begun.
Brainstorming with them about HOW they will get that item, what it costs and how long it will take to save for it, engages them in the planning.
Children learn by doing. Having some money to make a plan with, allows them to develop the saving regularly habit.
They gain confidence by practicing and acquiring skills.
Teaching them successful saving strategies helps them learn the fundamentals of sound money management. Saving regularly is one of these. It teaches them:
- It’s OK to want things and a financially healthy way to get them
- How to make and use a money plan, aka “budget”
- How to prioritize short and long term goals
- Delayed gratification
- The "language of money" eg: interest, compounding
- To always have money set aside
How to get them started
Help them make a plan to save some of their money for that item they told you they really want. Remember the two savings accounts we talked about last time? It’s now time to really activate the second account. Why? It holds the money for their mid and longer term goals.
Show them they already know how to save! Point out to them they are already saving because they have the PAY MYSELF FIRST Account (PMFA). This account holds the money for their long, long term goals.
Chances are if they are encouraged to save some of their money on a regular basis they‘ll continue to do so. Now they are on the road to becoming successful savers!
“If you would be wealthy, think of saving as well as getting.” Benjamin Franklin
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