Saving money is one of the most important aspects of building wealth and having a secure financial foundation. Yet many of us have learned the importance of saving money through trial and error.
In part two of our savings guide we look at the importance of getting children in to the habit of saving as early as possible and the range of saving accounts available. We start with tips on how to make savings fun for children.
Start with a piggy bank
Children as young as three can understand the concept of saving and spending money. A piggy bank can be a great way to teach children the importance of saving, while giving them an easy way to do it. Setting a goal of filling up the piggy bank, until there is no room, is a great way to motivate children to save.
Open a bank account
Once the piggy bank is full, get children involved in opening up a savings account (see the account options below). It can provide a great source of motivation for children if they understand that by putting their money into a savings account rather than simply spending it, it will grow over time!
Use savings jars
When your kids really want the latest toy, let them know they will have to save up for it. Give them a jar and offer them an allowance each week in small denominations to encourage saving.
Make it fun and visual
Setting up a savings chart and using stickers to identify key milestones, such as when they reach 25%, 50% and 75% of their goal, is a great way to keep them motivated.
Visuals are also helpful in illustrating their savings goals and how their money is growing. Encouraging saving up for short-term goals, i.e a new toy will incentivise and motivate them to continue saving in the future.
Lead by example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly.
Reiterate the message that every time you get paid, you save a portion of your salary to help prepare for the future.
Start a conversation
One of the most important things you can do is to start a conversation about money and the importance of saving. Let your children know they can have an allowance, but it’s up to them to save up for things they really want.
Teaching children how to save money may seem like a tough task. But using these tips, you can make your child’s understanding of money fun and accessible. It’s an investment in knowledge which truly pays the best interest.