10 Ways to Help Your Kids Save Money
Parenting experts agree: teaching kids good money-saving habits is time well spent. You can start them young - whenever they’re old enough to understand that money has value and wise enough not to swallow any coins!
Here are 10 ideas for teaching your kids valuable life lessons about saving money wisely.
- Get a simple jar, piggy bank, or coin sorter, then give your kids all your spare change to “deposit.” When they ask you to get them a toy, you can explain how much they need to save to buy it themselves. (“The jar needs to get to be this full” or “The quarters in the coin sorter have to reach this level.”)
- Have your kids help you clip coupons and shop for groceries. Explain how much money they’re helping you save and reward them for their help with a small treat at the store. As your kids get older, you can also teach them to compare product costs by price-per-unit, rather than just retail price.
- When your kids are old enough to help with chores - make their beds, take out the garbage, walk the dog, set the table for dinner, whatever - pay them a weekly allowance. And make this rule: they can spend half the money, but they have to save the other half.
- When your young kids want to buy something with their money, make them wait a week (or two) before taking them shopping. The urge may come and go, helping teach impulse control. If they still want to buy the thing after this “cool down” period, chances are they really do value it.
- When your kids reach their tweens or teens, take them to a local bank and open a savings account for them. Then they can deposit money from allowance, birthdays, and holidays - and see their account grow.
- For teenagers, consider giving them a lump sum once per month (or quarter) instead of a weekly allowance. The rule is: they are responsible for ALL the things they buy - school lunch, snacks, clothes, movies, event tickets, EVERYTHING. You’ll have to figure out the right amount to give, but it will force your kids to budget themselves…and face the consequences if they run out of money before their next “pay day.” Don’t be surprised if this approach helps your kids think twice before making impulsive spending decisions.
- Also for teens, have them invest some of their allowance in stock (or simply track gains/losses on paper). This can get them thinking about what companies might grow and how the stock market works.
- If you have a business, “hire” your kids to do office chores - like filing paperwork, delivering mail to the post office, or cleaning your office. “Withhold” a portion of their pay as savings and tie it to a concrete goal, if your child has one, like seeing a Broadway show, taking a school trip abroad, or making a major purchase. (Bonus: you might be able to write this off as an employee expense - consult your tax advisor!)
- Whatever age you kids are, give them added incentive to save by offering matching funds. It doesn’t have to be dollar-for-dollar; you can say something like, “for every $5 you save, I’ll throw in another $1.”
- Teach your kids life skills that will help them save money: cooking, laundry, ironing, researching utility providers, anything you do yourself to economize. The savings may be indirect, but they can add up to big money over time.