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Making Saving Fun for Young Children

Posted In Savings - By KidsMug On Wednesday, February 22nd, 2012 With 0 Comments

My son loves saving money. He loves to watch the pile of coins and dollar bills grow in his big, re-purposed pickle jar and he loves emptying out this ceramic “cash cow” to take his money to the credit union – and receive a prize. Watching his money pile grow and receiving prizes are two things that inspire my son to save. But there are additional ways to motivate your child to start saving. The most important thing at the beginning is to make saving fun. Plus, the earlier you start teaching your children to save money, the better off they’ll be. Even toddlers can do it, but you have to teach this concept in a way they’ll understand. Then, as your children grow, you can introduce more sophisticated saving strategies. Here are a few ideas to teach your children to save money at any age.

Making Saving Fun for Young Children
My son was introduced to saving as a toddler. We didn’t use money at first, and in fact, we weren’t even trying to teach him about money. What we had was a reward system for watching TV based off of coupons. He could earn “coupons” that could be exchanged for TV time and we labeled each of our DVDs with the number of coupons he needed to watch them. The short episodes of “Berenstain Bears,” for example, required one coupon, while the long “Incredibles” movie required four. Pretty soon, he caught on that if he wanted to watch a longer movie, he needed to save his coupons. Then, when we started paying him an allowance around the age of five, my son easily understood that he could spend and save his money like he could his coupons. When it comes to learning concepts like saving, visuals and physical interaction are important, especially for young children. With that in mind, here are a few ideas to teach your child how to save:

1. Use Different Envelopes/Jars
You may be familiar with the envelope budgeting system for your own money, but this can also work for children. On either envelopes or jars, have your child draw pictures of what he or she wants. You may also want to help your child understand that some items will take longer than others to save for. For example, the short-term savings container might have a picture of a specific toy, while the long-term container might have a picture of a trip to Disneyland. Teach your child to set aside money for short-term and long-term goals, and have another container or envelope for spending on everyday items.

2. Make a Savings Goal Chart
Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. You can represent each week with a box and your child can put a sticker in that box once the money from that week’s allowance is set aside.
We did this with my son, and he put a picture of the Transformer toy he wanted on the chart. We figured out how many weeks of allowance it would take to save up (after his long-term savings and church donations were taken out). Every time he received his allowance, he would divvy up his money and put a sticker in a square (he loved stickers at the time). This way, he could see himself getting closer and closer to his goal.

3. Offer Rewards for Saving Money
Consider rewarding your child for saving his or her money. Much like my credit union, which offers t-shirts and other prizes, you can offer prizes to your children. For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves. Try stickers, an extra 1/2 hour of video games, toys, or whatever motivates your child.

4. Set a Good Example
One of the best things you can do is let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is “normal.” Plus, since most young children want to be like their parents, seeing you do it will provide them with money lessons that further inspire them to save.

5. Match Your Child’s Contributions
A “savings match” can be a great way to encourage your child to save extra money and get an early peek at the benefits of a company match for a retirement savings program like the 401k. While we have a standard amount my son is required to set aside from his allowance, if he chooses to save more, we match it.

Original Article published on: http://www.moneycrashers.com/teaching-kids-save-money/

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