Teach Children to Save Money
“Mommy, can I get this [insert item here:toy/candy/shirt….]?”
I’m sure that question sounds familiar to many moms, and dads, around the world. It is part of what can make shopping with kids difficult.
The good news is that this is a perfect chance to have a chat about money with your child.
It can be hard to teach kids about saving money and how money works. But I firmly believe it is a vital lesson to teach to our children.
They need to have a good grasp of finances when they have homes of their own.
Today I want to share with you how we are teaching our kids about money. Our children are currently 8, 6 and 4 years old.
Ideas for Teaching Kids About Money
Teaching your children about money, and how to manage it well, does not have to be hard.
I hope these tips and tricks will help you start thinking about ways you can teach your own kids to save money and learn about how money works.
Talk About it.
I grew up in a home where money wasn’t really discussed. My parents wanted to shield us from their worries.
So I learned about money more through experience. Which isn’t bad of course, but I want to help my children be prepared for their financial journey.
So, in our home, we talk about money. We say whether something is in the budget or not.
They knew what was happening while we were paying off Daddy’s student loans. We talk to them about our family goals, and how we had to delay a trip to Disneyland because we needed to save up for it.
Money is definitely a topic that we don’t shy away from in our home. We want our children to feel free to ask questions.
Set a Good Example
I know it can seem like kids don’t listen. But they do absorb so much more than we give them credit for.
The same is true when it comes to money. If we are stressed about it, or fight about it, they notice.
If we show our kids our budgeting routine, talk about saving goals and then how we spend the money we saved, they will see what we do and take it in.
We recently took our kids to Disneyland. We had saved up for the whole trip, and they knew that.
We also set a spending budget for while we were there and they were able to make souvenir decisions based on that budget.
So set an example for your kids to see that they can absorb over time.
Give them a chance to earn money
How can kids learn about money if they don’t have the chance to earn it? Money comes from work, it doesn’t magically grow on trees and credit cards aren’t magical money devices.
The best way that children can learn this fact is to give them a chance to earn any money they receive.
We do not give allowance in our house. If our children want money, they have to work for it.
They can do this either with extra chores around the house, or helping with small cleaning tasks and projects at our dental office.
RELATED ARTICLE: How to Make Money as Kid
Have a Designated Savings Jar
Once kids have earned money, they need a place to store and save it. Having money laying around the house definitely confuses the matter on who it belongs to.
So get them a piggy bank.
I actually recommend getting a clear container for kids to stash their cash.
I LOVE this Dave Ramsey.
This way they can watch their money grow as they add to it. As they watch the cash build up, it will help encourage them to want to save even more.
Set Savings Goals
We have one child that is pretty good about saving. And another that cannot wait to just spend what he has.
But telling a child that they can’t spend their money doesn’t make sense to them. So help them come up with a reason to save.
The child that is better at saving is working towards a Nintendo Switch. The child that likes to spend is working towards a more expensive toy he wants.
Setting these goals gives them a reason to save, and helps them see that, when they want to spend, it will take away from their money to buy the big thing they want.
This teaches them about trade offs when it comes to money and learning to delay gratification.
Allow for Mistakes
Pretty much everyone has made mistakes with money. I am no exception. And as an adult, money mistakes are rather painful.
The great thing about teaching kids about money, and how to save, is that, when they make mistakes, they are in a safe and relatively controlled environment.
Making a big money mistake as a child, with parents there to help, is much less problematic than making a big money mistake as an adult.
When our kids first spent some of their hard earned money, at least one experienced buyer’s remorse. They were so anxious to spend it, they didn’t stop to consider whether what they were buying was really something they wanted.
This was a huge lesson that is much more painful as an adult. But for our kids, we were able to turn it into a lesson about wants and needs and being careful with how they spend their money.
Teach kids to Avoid Impulse Buys
One of the great ways to stop the “Can you buy me this?” question is to turn it back on your kids.
When they ask this question, you can tell them that they are welcome to spend their own money on the item. So then, they have to decide if it is worth it.
You can take it a step further and encourage them to think about it overnight, as the item will still be there tomorrow.
This stops the impulse purchase and makes them think about how much they value the item. And, of course, if they decided it is worth it, they can then get the item at a future date.
Final Thoughts about teaching kids to save money.
Saving money can be a difficult skill to develop as an adult. But when we start helping our children to learn the skill while they are young, it will be easier for them in the future.
Teaching children about money, and how to manage it well, is a huge lesson that will benefit them throughout their life.
I hope this list has given you some encouragement to start helping your kids learn about money and saving.
How do you teach your children about money? I would love to know your best tips! Leave a comment and let me know.