Teaching your kids how to save is easier than you think. Here are five tips!
Mel Barnes, SVP – Chief Operations Officer
Think teaching your kids how to save money is impossible? Admittedly, it can be a bit tricky (though not as difficult as getting them to enjoy broccoli or volunteer to clean house). Teaching your kids to save is actually easier than you think. All it takes is a little “P&D”—Planning and Discipline. Both from you, and your kids. You need to plan, with ideas and activities that are appropriate and achievable. And you and your kids also need the discipline to see those plans through.
It may not be as easy or as fun as playing video games, but it pays off. When you teach your kids to save, you will have raised lifelong savers, which will pay dividends (literally and figuratively) for the rest of their lives. Here are five tips to teach your kids to save.
1) START A PIGGY BANK
A classic! The piggy bank is a tried-and-true method for a reason: It works. Start with small amounts (dimes, quarters, but no more than a dollar) and teach your kids to fill up the piggy bank before taking money out. While piggy banks aren’t great for compound interest, they are a simple way to illustrate that the more you save, the more you’ll have later. BTW, it also doesn’t have to be a “piggy” bank. Kitten, puppy, dinosaur, Disney princesses and superhero banks work well too!
2) CREATE A SAVINGS JAR
Think of this like “Piggy Bank 2.0.” While the piggy bank teaches your kids the value of saving in general, a savings jar is geared towards a specific purpose: a new video game, a new bike, a new...whatever. If your kid wants something, this will encourage them to save their money from allowances or gifts for later. What’s also great about this method is it teaches your kids about hard work and patience. Instead of spending their money on something they only kind of want, your child will learn to save it until they can afford what they really want. Pro tip: Use a clear jar so your child can see how much they’re saving.
3) OPEN A BANK ACCOUNT
If your child is old enough to have a job, opening a bank account is a must! We suggest keeping it simple for now with a checking account. Your child will have an early primer on how to budget for basic necessities while saving for long-term goals. Even if it’s just budgeting for gas money or movie tickets, it’s so much better to learn how to budget now before hitting the real world. If you need tips on checking accounts, contact us.
4) START A SAVINGS ACCOUNT
You may have already started a savings account for your kid when they were little. If so, thumbs up to you! If not, no worries, but you should definitely start one once they are earning money on their own. Just like your kid needs to budget for certain expenses, they should also budget for their savings. We suggest putting away 10% of what they earn, though really, saving any amount is better than nothing at all. Giving them ownership of their savings account is the same principle as the savings jar, just a lot safer! If you’re interested in opening a savings account or switching over to one of ours, let us know.
5) SET A GOOD EXAMPLE
Here’s the most important savings tip: If you want your child to be a good saver, you should be a good saver too. So, just like your child has to save for a new video game, you should do the same for a new car or TV. We’re not suggesting you do without (if the washing machine breaks, please fix it, ASAP). But make sure your child understands you can afford to fix the washing machine because you saved for just such an occurrence. When it comes to saving, setting a good example is a great lesson for your kid, and a smart life plan for you.
Whether you’re a kid or an adult, saving can be tough, especially in this day and age. Whatever your age, being a good saver takes a little P&D—Planning and Discipline. Let us help! Stop by an OSB branch today to speak with one of our bankers about which accounts may work best for you and your child.