Children will usually not save money on their own, at least not without some guidance — what you will provide.
Benjamin Franklin said, “Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants.” Even so, your children need to know how to acquire and manage money and the following tips will help you in that endeavor.
1. Give them a piggybank. Start your children saving money young by giving them a piggybank. Children as young as three can gain an appreciation for collecting loose change and socking it away in a bank. Twice each year, empty the bank and count up the money with your child to show him how much he saved. Then, take that money to a bank and deposit it into an account. That account should be a special savings account for the child, entrusted by you.
2. Provide a weekly allowance. Young children can be given an allowance too. That three-year-old can appreciate a dollar bill, money that can be used to buy toys. And, with the prevalence of dollar stores, she can learn just how far her money will go. She will also learn an invaluable lesson about tax — that $1 toy will actually cost her $1.07. When very young, cover the cost of tax. By age 10, show how taxation erodes the value of money.
3. Show how spending less is good. Money tends to burn a hole in the wallet of some adults. The same can be said for children. When you give your child an allowance, demonstrate to him how the money might be used. For instance, a portion of the money might go to your church. A few coins could end up in the piggybank. The rest of the money might be available for spending. Show how waiting on making a purchase can yield a smarter purchase especially if something they want goes on sale.
4. Give your children opportunities to earn money too. Young children can handle chores and should have set assignments to handle daily or at least weekly. Beyond that, you can provide additional opportunities for them to earn money, perhaps by doing special chores. They might also sell toys they no longer want at a garage sale that you hold. With the money earned, those funds could be used to buy something else or put into a savings account, perhaps both.
Will your children fully understand money at a young age? Perhaps not completely, especially when taxation is factored in. It is a start, however, a lesson that you will begin teaching and keep reinforcing as long as they live under your roof. Start today and the lessons will begin to pay off tomorrow.
See Also — The Advantages of Savings Accounts for Kids
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