Teaching Children to Save Money

Teaching children to save money is an effective way to help them build a more financially stable future for themselves.

Learning about money is a an important but frequently over-looked part of a child's development.

Since they won't teach your child how to manage money in school it is your responsibility as the parent to teach them what they need to know.

5 Tips for teaching children to save money

Here are 5 tips that will make teaching your children to save money a little easier.

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1 Make it visual or interactive - make it something tangible, something they can see or interact with. For example, your child may be too young to understand what a savings account is but you can teach them the concept of saving money by having them put money in their piggy bank.

2 Be a role model for them - Let them see and learn from you, teach them how you save and manage your money. Be creative in your approach and make it visually interesting for them. Design a simple savings chart, let them see how their savings grow over time. When you go shopping let them see how you shop around for the best price.

3 Open a savings account for them - When your child is old enough to know what a bank is and does, open a savings account for them. Get them into the habit of depositing a percentage of their money (about 20%) into their savings account.

4 Help them establish a savings goal - It's much easier to get children to save their money if they have a specific savings goal in mind. For example, let's say your child wants to buy a new bicycle.Cut out a picture of the bicycle from the catalog and paste it to a savings chart. That way they can see how much they have saved and how much more they need to save to buy that bicycle.

5 Give them an allowance - Finally, an allowance is a good tool to help teach your child the value of a dollar. It also helps to reinforce what they've learned about saving money since it gives them a regular amount of money they can contribute.

The other important thing an allowance will do for your child is help them develop money management skills. When your child receives their allowance they will have to decide how much they can spend now and how much they should save.

There are alot of differing views on allowances, most parents believe in giving allowances to their kids for doing chores around the house. Some parents believe it's wrong to pay kids money for chores they should be doing anyway - just to help out. Then there are those who give money to their kids more as an essential need than a privilege without any conditions at all.

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