Teach Children to Save

At what age did you start learning about saving money? Every April we celebrate National Teach Children to Save Day to recognize the importance of saving money and financial literacy. Financial literacy is often overlooked when it comes to children and according to youth.gov, “A survey of 15-year-olds in the United States found that 18 percent of respondents did not learn fundamental financial skills that are often applied in everyday situations, such as building a simple budget, comparison shopping, and understanding an invoice.”

By teaching children the importance of budgeting, saving and cost comparisons, you are helping build a foundation that will keep them from making big financial mistakes as adults. Consider implementing a few of these steps to start the conversations about saving money with your children.

1. Give each child a bank. Piggy banks are a common way to start the savings process. Start with nothing so they can see their savings grow.
2. Open a savings account and let them see the balance grow there too. This can eventually be a lesson on interest as well.
3. Show them what things costs. When they want a new toy, direct them to their savings. Ask them to consider whether to toy is worth the amount they want to spend. If they still want to purchase the item, have them pay. The act of paying with their own money will demonstrate to them the cost of the toy.
4. Demonstrate needs versus wants. Explain how food, clothing and shelter are needs. But we can live without going out to eat, buying a new television or the latest technology—those are wants. Place the needs before the wants in your daily shopping to show the difference regularly.

Making these small changes can really help kids getting on the right track toward financial literacy. The earlier we start teaching our children to save, the sooner they can begin investing and building a future for themselves and their children as well.