6 Easy Ways to Teach Your Kids How to Save Money

We teach our kids to read. We teach them how to write. We teach them to be good citizens, to be polite at the table and to be kind to others. So why don’t we teach them about the importance of saving money?

When it comes to being smart with savings, the lessons can never start too early.

For good or bad, the habits young people learn early will stick with them for a lifetime. If you want your children to be successful and financially savvy, you need to teach the right lessons and reinforce them whenever and wherever you can.

Here are 10 smart ways to encourage your kids to save more and spend less.

Make a ‘piggy’ bank. You don’t need to be crafts expert to make fun little object with a coin slot. Simply having a fun place to put those coins and spare change can encourage young kids to save. Get creative. Maybe a “kitty” bank or “puppy” bank will get your kid excited to stash savings away.

How to get started: Give your kids a buck or two of spending money when you go out, and make it clear that what they have left is theirs to keep.

Teach them to wait it out. If your child has his heart set on some new gadget or toy, require a reasonable waiting period. This “cooling off” can reduce impulse purchases. If kids can’t remember they wanted it after a day or two, teach them that it wasn’t worth buying anyway.

Award progress. Establish a savings goal for your child, based on the amount of allowance they get, income from chores and so on. Track the progress on a weekly basis and offer bonus money for a job well done. For example, if she receives $10 a week, reward her for with an extra $5 every time she is able to to sock away $100. Which leads us to…

Get kids excited about compound interest. The concept can be hard for young children to grasp, but older kids will certainly appreciate the idea of free money from the bank. Make it easy for them to understand — and show them the fruits of letting money grow.

Offer matching funds. Does your son or daughter want a guitar or skateboard? Offer to match their savings to help them get halfway there. This is a sneaky tactic that could help out later if your child grows up to have a 401(k) where their employer can match contributions.

A 2015 study revealed that a quarter of employees don’t take advantage of employer matching, leaving over $1300 on the table each year.

Set a good example. You gotta practice what you preach. Think about how you spend your money and the message you’re sending. No matter what your financial situation, it’s important to show respect for the money you earn.

Key takeaway

Teaching your kids to save in a world that seems to encourage spending is no easy task. If you want your children to grow up and be financially independent adults, show them that financially-smart kids finish first.






Author:
Lindsay Goldwert is Senior Editor at Stash.



Disclaimers
This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.