by Emily Hechler 
Teaching our kids to save money is an essential life skill that they need to manage their money well as adults. It can be tricky to know when to introduce your kids to how money works. It’s even more difficult to know when to put some of the responsibility into your child’s hands.
If you are thinking about how to teach your child to save money, then it is safe to assume that your child has a basic understanding of how money works. If not, check out this article about introducing your kids to money first.
In short, it’s never too early to teach your kids to save money. Kids receive money for birthdays and holidays starting at a young age. Let’s go back to when your child was born. Your child might have been gifted money even then. Did you start saving money for your child’s future at that time? If not, it’s not too late to start now. Regardless of when you started saving for your child, you need to save for your child before you ask your child to save for themselves. The last thing you want is to not practice what you preach when your kid is old enough to understand basic financial concepts.
When I was young, I would give any money that I received as gifts to my mom. She gave me the option to save it or spend up to half, then she would deposit the money I chose to save into a savings account. I think this was a great approach for a few reasons. First, it helped me develop a saving habit instead of a spending habit. Second, it gave me some freedom as a child to decide what to do with my money, while still keeping it within reason.
Another practice you can implement with your kids is to give them an allowance. If you want to make the stakes a little higher, have your kids earn their allowance by completing chores around the house. The money your child receives from doing their chores can make the money seem more valuable to them since they had to work hard for it.
Alltru’s CUbby youth savings account for kids ages 12 and under makes saving money fun. You only need $1 to open an account with a parent or legal guardian. A great interest rate rewards your kids for not spending their money. Plus, kids get a prize on their birthday and for deposits over $10.
When your child gets older, you can give them more freedom with their money. To help prevent impulse buys, suggest that they wait to make a purchase until the next time you go shopping. Impulsive purchases can quickly add up and drain their account. On the other hand, avoiding impulse buys gives your child the opportunity to save for something more meaningful and expensive that they’ll value for a long time.
Once your child has developed good saving and spending habits, help them create specific savings goals. By helping them through the process, you can emphasize the importance of saving for future expenses. While your child may not need an emergency fund or own their own house for a while, they can start saving for larger purchase, like a car or college tuition. To encourage them to stick to their goals, offer a small incentive when they reach their target. Yes, this will involve spending a little money, but celebrating their achievements will make a lasting impact. Consider treating them with a Starbucks gift card or a new Nintendo Switch game.
Encouraging your kids to save money from a young age can set them up for long-term success. With goal-setting and increasing freedom as they get older, you are helping them build a strong foundation for financial independence. As they become more financially responsible, they’ll see more money in their accounts and they’ll have great money management habits too that’ll serve them well throughout their lives.
