Friday, January 27, 2012

5 Easy Strategies to Help Your Children Save Money

Most people can remember a time in their childhood when they truly wanted an item and had to save up for weeks or months in order to purchase it. Your children should be able to learn the same lesson by slowly saving up for important items they desire. For young children, this might be a new toy or a video game, while for teens this could be a new car or even savings for their college education. Although it can be a struggle at times to help children want to save rather than spend their money, it can help them to be more fiscally responsible later in life. Here are some easy strategies to help your children save money.

Kids and Money Large
1. Start a Savings Account: It might seem unnecessary to start an account for young children or those who are only saving minimal amounts of money. However, this is an important step to understanding saving and also understanding personal finances. Most banks allow children and their parents to start a bank account with no fees and a minimum deposit of anywhere from $20 to $100.

2. Have a Goal: Saving just to save is not beneficial for children or enjoyable. Most will need some kind of goal to work towards. Carefully consider what might be a good thing to begin saving for. It doesn't need to be something big. In fact, it is a great idea to start with something that can be purchased after saving for just a few weeks. After realizing how helpful savings is in order to make a larger purchase, you can start suggesting more and more expensive items.

SAKURAKO gets money from a cash register !
3. Visible Reminders to Save: The reason children struggle with saving is that they prefer instant gratification to something that is delayed and might take months or years. To help them deal with this, make some visual reminders to show them what they are saving for. You might clip out the ad for a new video game or bicycle they want, or for bigger items make a collage on their bedroom wall to remind them of what they are working towards.

4. Percentages of Allowance: Since most children don't have any jobs or way to make money outside of the home, money will come primarily from the parents. If you give them an allowance each week, set aside a certain amount for savings. This might be nonnegotiable or merely suggested, depending on your own personal parenting opinion. For example, if allowance is $10 per week, you might mandate that at least $1 goes into the savings account, but beyond that children will use their own discretion.

5. Track Spending: Have your children track their spending over the course of a month. Once they see how quickly money is spent on small items like comic books and candy, they may be more inclined to save up for more serious items.

By following these tips it will be easy to help children start saving and become more aware of their own personal finances.

Author Tanya Mitchell is a budget consultant and writes for Saving Up, a site which lets you compare savings accounts and get the highest possible interest for your hard earned money.
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