This post was underwritten by BMO Harris Bank, which offers a matching $25 on a new savings account opened for your child through their Helpful Steps for Parents program. Learn more at bmoharris.com/parents.
Christmas is coming, so when I saw the opportunity for this posting, I figured it would a great time to think about ways in which to teach my daughter about money and saving. She has already circled half of the toys in the Toys R Us catalog for hints to Santa, but that doesn’t stop her from asking for toys or ice cream, or other requests while we’re out and about.
Of course she knows about money and realizes that sometimes mommy or daddy doesn’t have enough to buy her something she is asking for. But she also has the impression that we can simply whip out our credit card or run to the bank to get more. When she was younger and used to ask me for things when I didn’t have the cash on me, she’d tell me to just call daddy and ask him for his card. And while I wish her impression that daddy has unlimited funds was true, its definitely time to start teaching her about money and saving. She’s in kindergarten now, can count higher and higher each day, and spent a whole week learning about the number ZERO, which is what we’re going to be on if we don’t teach her about saving.
How do you teach your children about money? Do they have an allowance? Do you make them buy what they want with their own money?
What about piggy banks? Or those toy ATMs? What are some ways in which you teach your children about how much money they have, and what’s worth spending it on?
After looking for some good tips on saving, I came across these suggestions on About.com:
For every dollar your child saves, offer to put in a matching contribution. When they are little, you might be able to match 100%. Once they are older 25% or 50% might be reasonable to encourage them to save.
Open a Savings Account:
Encourage him to deposit a portion of money he earns into a savings account and track the interest earned on his account.
Encourage Them to Set Goals:
If they want to purchase an expensive toy, hang up a drawing of an empty thermometer. As they save their money, color in the thermometer. They’ll be able to track their progress visually.
Give Non-monetary Savings Rewards:
Young children may not understand that $10 tomorrow is better than $5 today. Consider rewarding children with things special to them for saving their money: stickers, toys, and special outings can be helpful.
Make a Wish List:
Encourage children to identify fun things to spend their money on. For older children, prioritizing the list can be a helpful challenge.
Display a Picture:
Hang a picture of a wanted item off their wish list on the wall. If your child is saving for a special purchase, hang up a picture to remind them of what they are working towards.
Save Money in Front of Your Children:
Keep your own piggy bank or deposit money in the bank when you are with your children. Explain what you are saving for and your children will mimic your behavior.
Help Them Spend Money:
Occasionally, children will get so focused on saving their money, that they won’t spend any money along the way. Help them enjoy their money by spending some on small purchases or surprising them by buying something they’d like.
- Praise your child for any amount of savings.
- Encourage your child to keep saving even if he wastes his money.
Feel free to share your ideas below or on our Facebook page with other readers!