Some of the most important life lessons are taught outside of school. While schools are starting to incorporate financial education into curriculums across different states, there’s still a lot of ground for parents to cover at home.
Teaching kids about saving money is an important part of building good savings habits and reaching both short- and long-term financial goals. The money skills that kids (good or bad) learn when they're young will likely carry over throughout their life. Here are some ways to help kids start thinking about saving money.
Give kids control over their finances
One of the best ways to teach your kids about saving money is to empower them to independently earn and spend their own money. An allowance can be one way to teach your kids how to budget for their needs and wants, whether you choose to tie an allowance to chores, or not. Giving kids a chance to earn and spend their own money can help them gain a sense of value for money (that they don’t get from spending ours!) Some parents have found that giving their kids an allowance actually saved them money.
Motivating kids to save
Kids always have their eye on something, whether it's a smartphone, video games, or clothes. Encouraging them to create a specific savings goal in the GoHenry app can help motivate them to save towards the things they want most. One way to help keep them on track is by offering an incentive by adding to their savings funds when they reach certain milestones, "For every $10 you save, I'll add $2," or take it a step further with "End of each month I will add 5% to your savings."
This helps introduce kids to the concept of interest while motivating them to save more as the more they accumulate, the more they will get.
Match their savings
Maybe your kid has their eye on a larger prize that seems impossible to achieve. You may consider encouraging them to save up for a portion and then you can match it or supplement the rest, giving them that motivating boost to get started. This can be a great way to get kids thinking long-term, especially for those bigger items, and help them prioritize their spending to reach financial goals.
How GoHenry can help
Whether short-term for a video game or long-term like a vacation, GoHenry allows kids to set up multiple savings goals and track their progress right in the app. Even if your child doesn't have a specific saving goal in mind, they can add money to a general savings pot.
One mom found that using GoHenry helped her 10-year-old make his own financial decisions, only spend when he has money, and learn to save money along the way.