7 tips for teaching kids to save

December 28th, 2012 Carol Petersen

One of the best financial lessons you can ever teach your kids is how to save money.

Once kids become fans of saving money, and learn how to do it, they’re taking a valuable step forward in building a great financial future. And as a parent, one of the most satisfying things in life is believing your kids will have a sound and successful future.

To help you get started, we’ve put together these seven tips to help your kids start saving.

1. Open a piggy bank and savings account for them.

Having their own savings account at a bank can be a huge motivator for a child. Each week, they can add to their account, and see how it’s growing. It makes them feel really good! Also, by having a piggy bank or jar bank at home, it gives them an easy way to save money daily to put into their bank account weekly.

2. Give a weekly allowance and encourage them save part of it.

It’s hard to save if you don’t have any income! So it makes good sense to give your child an allowance each week, and convince them to put part of it in savings. In fact, you can even insist that they save a certain amount, and help them develop the savings habit.

3. When they want something, set up a savings plan to help them buy it.

Parents often buy their kids whatever they want. This teaches the kids they don’t need to save.  A better approach is when your child wants something, tell them they will have to buy it.  Then set up a savings plan for them that will help them save the money to buy what they want. They’ll feel very positive about buying it themselves.

4. Help them earn money at home.

Another way to help create income – which is a key factor in saving –is to create jobs and tasks at home that you can pay your kids for.  Then, when you pay them, encourage them to set aside some of their “paycheck” to a savings account.

5. Chat often about how you save money.

Kids may often act like they don’t listen to their parents, but the truth is, your children do listen to you, and believe in your values and what you do. So the more you talk positively about how important saving money is to you, the more important it will be to them.

6. Encourage them to save when shopping.

Another great way to help your kids learn about saving is when you’re with them at a store. Help them look for the best value items, lower prices, and even use coupons. Then, encourage them to take the money they saved, and add it to their savings account.

7. Give them a cash reward for hitting a savings goal.

Incentives are always positive when it comes to finances. If you set a savings goal for your child, and then promise to give them additional money when they hit the goal, they’ll work even harder to achieve the goal – and to collect the reward from you!

When’s the best time to get your child to start saving? Right now! Use the tips above and you’ll be able to get them started saving – and keep going. In the long run, it will be one of the best things you ever help them learn how to do.

About the author

Carol Petersen is Retail Managing Officer at MidWestOne Bank. She specializes in checking and savings accounts, consumer loans, auto loans and home equity loans.

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