Life Stages: Teaching Children to Save

Money doesn’t grow on trees, you know. How many times did your parents say that to you when you were growing up? How often do you say it to your own children?

Good spending habits are created when we are young, but most kids don’t get a proper financial education. In an age when American teens are spending upwards of $100 billion of their own money each year, becoming financially responsible is crucial.

By teaching our children that money is earned through hard work, and must be saved and spent wisely, the happier and more productive they will be. And, if they learn about money before they have any of their own to spend, they can avoid serious financial mistakes later in life.

Help Children Learn How to Manage Money

Giving young children a small allowance for doing regular chores helps them understand that money is earned, not given. Increase the amount as they get older, but don’t rescue them if their allowance runs out. By the time they are 16, encourage a part-time job on weekends and during the summer.

Set A Good Example

The financial messages your child receives from you when they are young shape their own behavior once they are adults. If children see that you don’t have the patience to shop around and compare prices, how will they learn to do it?

Teach Them to Think Before Spending

Impulse buying can lead to buyer’s remorse and out of control credit card bills. Have them ask themselves if the item they want is really something they need, if they can afford it, and if it can be found elsewhere for less.

Money Isn’t Everything

By teaching young children to donate extra toys to a homeless shelter and older children to set aside a portion of their allowance for a cause they care about, you will teach them that there is more to life than material goods. You can also encourage teens to get involved with their community through organizations like Junior Achievement. Through your guidance, you can show them that money isn’t everything.