Saving money can help build your better future by giving you the liquidity you may need for unexpected expenses, large purchases, etc. Learning about savings early in life can establish an excellent runway for your financial future.
So how do you teach children about the importance and fundamentals of saving? Great question. We asked our team to share some of their earliest memories about how they learned about saving. Maybe you will find some of them helpful for sparking the conversation with your family.
“As a child, we would save our coins and birthday money to buy something special. Shortly after our birthdays, my mom would take us to a store to spend our money. I remember one occasion specifically, where I had picked out a doll I HAD to have. My mom explained that I could trade all my coins and dollar bills for the doll. At that moment, I didn’t think it was a fair trade because the money looked to be a lot in my five-year-old mind (although it likely wasn’t more than $20). If only I were still as frugal as my five-year-old self.”
This example is a great way to get children to understand the concept of spending and savings, especially for saving for larger purchases or wants (that may seem like needs).
“When we were old enough to understand the concept of earning and saving, my parents would pay us for our assigned tasks or chores. When we got paid, we put 50% of the earnings into our savings account. To fully understand the process, we would go to the bank to cash the check and make the deposit to our savings account.”
This example is another impressive way to teach children about savings and follows the savings tip of paying yourself first.
“For our children, we taught them about saving by having them separate the money they earned and were given into three categories: spending, saving, and giving away. We had them put the money into these three categories equally, which taught them not only the importance of saving but also giving back to the community.”
“Our parents also had us split our money into spending, saving, and giving back – although in different percentages. They also taught us to save our spending money for things we wanted to do or wanted to buy instead of spending it on the first thing that caught our attention. This added tip led us to learn that life experiences together were more important than things.”
As you can see through some of our team’s examples, there are many different ways to get children to think about money and saving it. Still in need of some ideas? Check out this article.