Teaching Your Child to Save

STUFFING THE PIGGY BANK TEACHING YOUR KIDS ABOUT SAVING.

Helping your child develop good saving habits will put them on the path to financial independence as they mature.

HERE ARE TIPS TO GET STARTED:

•Make sure they have money to save. Give an allowance tied to ageappropriate chores. • Ensure they save their own money. Discuss and set up a plan for how much of their money they must save (like 10% of their allowance and 50% of birthday money). • Talk about money. Whether you are at the store or paying bills, teaching kids daily financial concepts is key to their understanding the importance of money. • Teach the difference between “needs” and “wants.” This concept is the bedrock for all the financial decisions your child will make in their lifetime. • Use some of their money for purchases. Match their savings for a desired purchase, such as video games or clothing. • Match their savings. Matching their savings, dollar for dollar, is the quickest way to double their money and develop their saving habit. • Let them see what they’re saving. When they’re young, put their money in a glass jar. As they get older, open up a savings account and teach them how to make deposits, withdrawals, and balance it. • Teach the concept of taxes. The comedian Bill Murray said it best: To teach your kids about taxes, eat 30% of their ice cream! Most importantly, be a good example for your kids; they spend their lives watching and copying what you do. Talk with them about how your family saves and makes money decisions. Also, demonstrating why it was not a sound financial decision to make a certain purchase may be one of the best financial lessons you can teach them.