Teaching Kids About Saving
Habits developed early can last a lifetime, and when it comes to saving and spending, it’s never too soon to point kids in the right direction. You might think there isn’t much to talk about until they’re teens with their first paycheck, but many kids earn money much earlier — a weekly allowance at home, birthday gifts, income from pet-sitting, or other jobs they do in the neighborhood — it adds up. What do they do with it? Are they saving for something specific, or is it spent on the first thing they see?
While it’s easy to spend money, the important thing is teaching how to handle money and make smart choices. Helping kids create a plan for what they do with their cash can spark interest in seeing their savings grow and value their purchases when they choose to spend. You have money to spend when you save money in the first place, and there are different ways to look at savings:
Saving for little things: Whether it’s a treat from the ice cream truck or downloading a game on the weekend, this should be money they intended to spend, not an impulse. Small expenses, if properly budgeted for, are gratifying and encourage independence.
Saving for big things: Perhaps your child wants a new bike or game console. These items can be expensive, and even if you are going to help with the purchase, it’s a great opportunity to teach them how to build their savings. With a goal set and regular contributions, their motivation builds as they get closer to their goal. Once the goal is reached, encourage continuing to save for future wants or needs.
Saving for giving: There is the donation box for a local nonprofit or church, birthday presents for friends, or causes they may want to support — like giving to animal shelters, conservation efforts, or the search for medical cures. It’s easy for kids to make a difference where it matters to them if they have specific savings dedicated to giving.
A smart plan is to set them up with three “banks” — Mason jars are good for this. Label one Spend (for the little things), Save (for the bigger things), and Give (for charitable donations and gifts). They may want to decorate the jars and put them on display in their room — literally watching their savings grow. When they tag along with Mom to the grocery store and want to get gum, their Spend jar is handy, ready for the trip!
Stress that the Save jar should not be pulled from often — which makes it perfect to transfer into a bank account, like Texell’s Dollar Squad Savings Account. Once a month, offer to take them to a branch to deposit the Save funds into their Dollar Squad account, where it will earn interest. And Dollar Squad accounts come with an added incentive for saving: For every dollar deposited, kids earn one Squad Dollar to use for cool prizes in the Dollar Squad online store! So while saving their money, they still get to enjoy some splurging.
Whether your kids are still young or reaching their teens, Texell has accounts to help them begin a successful financial journey. When kids develop the habit of saving before they spend, it sets them on a course of responsible money management. Visit Texell.org/youth to learn more, or schedule an appointment at any branch to open their account today.
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