Help your children  save while young 

Encourage your children to become financially savvy
while young by including a savings strategy in their
use of money.

Savvy Kids and Saving Money:  Reality or Myth?

Our children are growing up in a culture that does not
encourage saving. Consider that in 2005, the savings
rate in the United States was -.5% -- we not only
didn’t save money, we actually spent more than we
earned. But saving is an important part of financial
health, providing you with both an emergency fund and
money for big purchases such as a college education, a
home purchase, or retirement. By helping your children
learn to save when they are young, you will be setting
good savings habits for their adulthood.

Setting goals

As your children save their money, it is very
important that you help them understand why they are
saving. They will be more motivated to save if they
are working toward a goal, so help them set reasonable
short and long-term goals for their savings. If they
want a new bike or a pair of “wheelies,” talk to them
about

-How much the item costs
-How much they already have saved that they could use for this purchase
-How much they can save from their regular earnings
-How they could earn additional funds
-How long it will take to earn the money

Then they can decide if the item is really important
enough for the effort. Then, when they finally make
their purchase, they will be proud of themselves for
having achieved a goal.

Of course, your children will sometimes forget their
goals when they see a cool new gadget on T.V. or in a
store. They will feel they need that item RIGHT NOW!
Remind them of their goals when they are on the verge
of impulsively spending money they should be saving.
If they still decide to spend the money, chalk it down
as a learning opportunity and let them — they will
either realize their goals have changed or they will
regret their impulsiveness and be more cautious next
time. If you refuse to let them ever spend their
savings, they will get discouraged and won’t want to
save at all.

Matching Funds

An excellent way to encourage your children to save is
to match their savings. Think of this as a homegrown
401-K program. After all, how many of us save just a
little bit more each pay period because our companies
match our savings up to a certain percentage? Whether
you choose to match evenly, 50 cents on the dollar, or
another amount, matching funds may encourage your
children to save just a little bit more than they
otherwise would have.

Savvy Kids Start Young

Encourage your children to become financially savvy
while young by including a savings strategy in their
use of money. It’ll be good for you and them. After
all, they may be taking care of you some day.

 To find out more about helping your children learn money
skills check out How To Raise Financially Savvy Kids.