How to Encourage Kids to Save Money

Posted by Ian on April-6-2011 under Save Money

Kids have no real idea of the value of money; from the time they’re born mom and dad have paid for everything. As they enter their teens, money is still of no real consequence until there is something he or she wants to buy or do. It is when a child is in his or her mid-teens that they begin to understand what money is all about. It is therefore, important to start teaching kids the importance of money when they are in their final years of elementary school; in these years they are old enough to know how to count money and understand the denominations. In the case of teenage children, they should be encouraged to “work” to earn money. When I suggest work, I don’t mean donning a hard-hat and heading to the local building site, I simply mean, doing chores around the home would suffice – mowing the backyard lawn, cleaning the garage, raking up fall leaves, etc – or perhaps finding a part-time job for after school.teach kids to save

If an adolescent has to earn money in order to buy something, he or she will learn the importance of saving. The only way kids are able to learn is through experience; sitting a teenage down and explaining the pluses of saving and spending wisely, is a waste of time. Seventeen and eighteen year-olds choose not to listen to the advice of older people; it is the revolutionary years. This is why having adolescents learn the importance of money through working is the best method; indeed, by extension, the value of money will also be learned. At a future time, when the kid wants to buy something else, he or she will probably start looking for work to earn the money.

Small kids, still in elementary school, usually receive a weekly or monthly allowance. It is difficult to have them save this allowance as they know that the following week or month, their allowance will be paid again. It is not, however, impossible to teach little children to save if you do it in a way that they are able to “see” the advantages to saving. For example, use simple math to explain how their savings will increase if they don’t spend all their allowance. Many Japanese parents save their child’s pocket money by only giving the child a percentage – a secret saving method.

Taking a child to a bank and opening an account in their name is exciting for any kid. Once the account has been opened, hand the child his or her new bank passbook and briefly explain how to understand it. This is an excellent way of teaching children how to begin a regular savings pattern – create a savings habit. If, in the event, your child wants to withdraw some of their savings, by all means do not discourage them; to do this could stop them from saving at all. Some parents insist on their children keeping receipts and other records of their spending. This is also a futile exercise and not worth pulling your hair out enforcing. We all know that many adults don’t keep receipts or records of their spending; expecting a teenager or younger child to do this is silly.

Allowing kids to decide their purchases is also a must. Do not try to convince them to buy something that you think is better. If what the child buys turns out to be a disappointment, this too is a learning experience. In the case of teenagers, encourage them to do research prior to buying. Do not be pushy and strongly suggestive, let the teenager decide. For older children, explain the tip-falls of taking out a loan. Kids generally don’t understand the concept of paying interest. There is no need to go into detail about borrowing money; you’ll only confuse a young mind and put him or her to sleep.

You can also check out other money saving tips like how to make a monthly budget, online coupon websites, or how to save money on college.

In conclusion encouraging kids to save money is not really a difficult thing to do, all it takes is patience and respect. Don’t be condescending, don’t be pushy and above all, do not question decisions. The websites below offer various other ideas in which to encourage kids to save money.

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