Learning good saving habits early in life could really help individuals in the long run.
Children whose parents or grandparents take the time to explain finances and saving to them will probably have a better handle on their spending and saving habits later in life.
Motivating them to start saving can be tricky though. Making it a fun activity usually encourages them to become interested in finances and saving.
Use these tactics to teach children about money and how long term saving is beneficial:
Having something to look forward to, is something most people, not just children, respond to well. Let children make a chart with the allotted amount of time and money it will take for them to save up for a new bike or video game that they want. Or, let them draw/cut out a picture of their goal and put it on a jar where they store their money. The visibility of the money is a reminder of how far they’ve come and how far they have left.
Often, credit unions with children’s savings accounts reward them with prizes for making a deposit. This can be a great way to also teach children about banking. Or, if they want to do their saving at home, create rewards specific to that child’s interests. It could be a trip out for ice cream or as simple as a sticker.
Children frequently mimic the behaviors of their parents. So, if parents set up a saving routine with goals or rewards for themselves and save alongside their child, it will reinforce the idea of saving. This could also be done by parents matching the child’s saving contributions, much like employers do with 401(k) accounts.
Although seemingly small steps, these tactics can create a lifetime pattern of saving and working toward long term goals for children. The adults can benefit too by putting their savings into a retirement fund.
Mountain West IRA does not offer clients investment, tax, financial, or legal advice. Individuals who believe they need advice should consult with the appropriate professional(s) licensed in that area.
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