Life Skills Blog

March 25th, 2009 | by Lynn | Tags: Bank, Bank account, Economics, Kids and Teens, Money, saving, School Time, Social Studies 

Tips on How to Teach Your Kids to Save Money

A lot of teens these days do not understand the value of earning OR spending money. Most were not oriented that investing is necessary even while they are still students.

As parents, we play a crucial role in this area. Our job as mentors should be to teach our children how to save money. We can not expect our young ones to realize on their own the “how and why” money plays a role in our lives. We cannot expect to have society show them, as we see currently, our society is in severe financial trouble.

Our youth should generally be able to understand the concept of money and investment as early as childhood. This will prepare them to learn more practical money management, as they mature.

Here are some tips on how you can teach your children how to save money:

1. Your children should be educated about the value of money. Once your children have learned how to count, that is the perfect time for you to teach them the real purpose money is applied in daily life. You should be consistent and explain to them in practical ways, showing them by example frequently so that they may be able to remember what you taught them.

2. Always explain to them the value of saving money. Explain to them the importance of not using money the wrong way and how it will impact their life. It is important that you entertain questions they ask about money and you should be able to answer those questions right away.

3. When the time comes for an allowance, give the kids their allowances in various denominations. This will teach them that each type  does not spend in the same manner, that it is valued more or less than the next type of bill ($1, $5, $10). Suggest that a certain amount of money be saved and applied towards the special pair of shoes or toys they want and encourage them to patiently gather that amount.

4. You can also teach them to earn money. Pay them fifty cents to one dollar every time they clean their rooms, do the dishes or clean up after their pets. This concept of earning a little cash will make them think that money is something they have worked for and should be spent wisely. Remind them that it may take (for example) 10 hours of work to pay off the “New must have Basketball Shoes”. Explain how the same concept can be applied to your paycheck and how you need to spend it to take care of your family.

5. You can teach them to save money by giving them a piggy bank where they can store coins. Show them it takes time and it is never easy to wait until it becomes full. You can also open bank accounts for them and let them deposit money from their allowance. You should always show them how much they have earned to keep them motivated.

Money and saving is not something that is understood by children in one conversation. Remember to be patient while teaching them and relating the value of money in all of their activities. Children will learn this easily if you are persistent and consistent in guiding them and encouraging them in this endeavor.