As parents look for ways to teach good financial habits, how to save money tops the list of skills to give your kids. But how do you teach your children about setting savings goals? And how do you show them the importance of saving money for the future?
Teaching kids how to save money
Teaching kids the importance of patience and putting money into savings can be difficult since saving money doesn’t offer the same instant gratification as spending. As you begin talking to your kids about saving, it’s important to help them understand how putting their hard-earned cash away today can help them accomplish big goals in the future. Our third Money Missions topic is savings habits, which teaches kids how to save money through fun videos and interactive quizzes.
A debit card for kids can also be a great tool to teach the importance of setting savings goals. Instead of piling up a bunch of cash, a debit card offers a safe way to save money. Use a kid’s debit card to teach your child how to save toward different goals and have fun learning about saving money along the way.
Setting savings goals for kids
Whether it's a new toy, concert tickets, or a first car, setting savings goals can be relevant and motivating for your kid. Explain how saving money now means putting funds aside to spend how they want later for things like new clothes or shoes, a car, or concert tickets to see their favorite artist. Use relevant examples from their favorite characters. Princess Tiana wouldn’t be able to run her restaurant very well if she didn’t save her money, after all. The more involved and excited your child is about saving, the more they’re likely to learn and stick to their savings goals.
Tips for teaching kids how to save money
As you talk to your kids about how to save money, here are a few, key, money-saving topics to cover:
1. Wants vs. needs
Explain to your child the difference between wants and needs. While you can save money for both, help your child understand their financial priorities. Consider starting a basic budget that helps your kid understand how to use their money wisely.
2. Earning money to save
How will your child earn the money they need to save? Discuss options for earning, whether that be an allowance at home or your kid’s first job. Earning income can give your child a sense of responsibility and can teach them the importance of taking care of their finances.
3. Where to save money
Where and how will your child save money? If saving cash, consider a designated safe spot, or use a debit card to accomplish savings goals. Debit cards allow teens to safely save money and practice financial independence.
Read more articles on saving here.