Learning to save money is an important skill for children that parents can start early at home with a piggy bank and with an account at a bank. If an allowance is part of a child’s life, then parents have an opportunity to teach children about the importance of saving and budgeting money.
Talk to children About Budgets
Actively role modelling is one of the best ways to teach children about how to save money and stick to a budget. When a parent is paying bills she can talk about monthly expenses. She can show children how money goes to pay for electricity, gas, internet, etc. Talk about how there needs to be a certain amount of money made and saved every month to cover these payments.
Saving Money for Long-Term Goals
For those of us in the UK, you’ve probably noticed that the base rate for the Bank of England has reached historic lows. Unfortunately, that means the savings rates have been impacted negatively. With enough due diligence though, you should still be able to find decent deals, allowing you to reap as much interest as possible. For my U.S. readers, your interest rates are not much better but I’m sure you’ve noticed that online savings accounts generally offer higher rates than those offered by standard, brick-and-mortar banking institutions. You should easily be able to find a good savings account by searching online. Just make sure you read customer reviews and verify that the institution is legitimate and reputable.
Let your child pick out what he wants to save his money in. It can be the traditional piggy bank, a jar, a special box they decorate or even an old sock. From a young age, you can start children on the path to saving by giving them change to put into their bank. When they get older they will want to spend their allowance or other money given to them, and parents can help them learn how to manage their money by giving them the space to choose how much of their allowance they want to save and spend. They will learn to put more away on their own once they realise the importance of saving money for bigger things they need or want.
Lucas has a Garmin Vivofit Jnr watch which gives us the ability to manage and assign responsibilities, set task timers and give rewards to motivate and help to create healthy habits while Lucas is still young. He has chores set on my phone app and once he has done the chores, chore coins are added to the app which syncs up to the watch for him to keep track of. He then converts the chore coins to money to either save or spend.
A bank account can be made in the name of your child at any time and it’s great for them to learn to put money in this account as well and keep track of the balance as they get older.
Control of Bank Accounts for children
When children get older, they can start earning extra cash from things like babysitting or mowing the lawn for neighbours or for doing “special” jobs around the house. At this time, children can look at putting money toward long-term savings too. Children can have full access to their short-term savings but long-term savings should be more structured and squirrelled away. For example, in order to take out the money that they are saving for college or a car, they will need to have a parent’s signature as well.
Books on money management for children
For younger children, there is a fab wipe clean money activity book. This colourful activity book is a perfect way for young children to start learning about money. Join the friendly monsters and complete a variety of fun activities, including coin counting, buying snacks, visiting the monster market and more. Great for developing pen control, and the pages are wipe-clean so children can practise again and again.
For children ages 8+, there is a book on money for beginners. An informative introduction to the world of money, covering everything from bank accounts, earning and borrowing to government spending, taxes and inflation. With bright, infographic pictures, a detailed glossary and links to specially selected websites where you can visit a virtual bank, see money from around the world and more.
For aged 11+, take a look at the book managing your money. This down-to-earth guide is filled with practical advice on everything from how to budget and be a smart shopper to student loans, mortgages and insurance. An essential book for equipping young people with the skills they need to manage their money now and in the future. Includes links to websites with more tips and advice.
Teens and Saving Money
As children near their teen years, parents can include them when it comes to the budget for the household. This helps them comprehend and appreciate the constant expenses that are part of running a household. If you want to teach your child to manage money well, it’s important for parents to be organised and good with their money. If that is not the case, think about getting help to get things in order. If parents have made financial mistakes they can talk about that and how they fixed the situation.
Teaching children to save money is an important life skill that parents can help by role modelling good money management skills, involving children age-appropriately with household finances and by having children start saving money early with their own piggy bank.