Have you taught your children the importance of saving? In honor of Financial Literacy for Youth Month this April, brush up on 10 ways to help your children learn to save and be responsible money managers.
1. Explain needs vs. wants. Explain the difference between needs and wants. Identify and prioritize specific needs and wants for your child.
2. Set goals. Have children set short- and long-term goals based on the needs and wants they’ve identified. Create a savings plan for how to accomplish those goals.
3. Pay an allowance. Have your child separate allowance money into a spending jar and a saving jar. You may want to split the savings jar into two separate jars for short-term items (e.g., iPod) and long-term items (e.g., college). You may also consider having a charitable giving jar.
4. Encourage entrepreneurism. In addition to household chores, what are other ways your child can earn money? Help them set up a lemonade stand or make a flyer for lawn-mowing services.
5. Open a savings account. Teach your child how money can grow through interest in a savings account.
6. Match savings. Incentivize your child to save by offering to match a portion of their savings.
7. Make a budget. Have your child learn about budgeting by involving him or her in the planning of an event, such as a birthday.
8. Teach smart shopping. Look at ads in print circulars or on different websites to compare prices. Have your child help you cut coupons and then find the discounted items at the store. Teach your child to look for sales before making a purchase.
9. Credit cards. Chances are you make some purchases with a debit card or credit card—and your kids see you do this. Explain that these cards are convenient, but one must have money to pay for those purchases.
10. Set a good example. If you want your child to be a good saver, you must be a good saver too. Talk to them about how having saving money has helped you, and let them see you being responsible with your money, including depositing money at the bank, paying bills and shopping on a budget.