Teaching Your Children to Save

One day it clicks – your child realizes that the money in the birthday cards from Grandma is a very exciting thing. Money is the key to getting what you want in life, like that new bike or favorite candy, so they assume. It’s off to the local discount store to excitedly spend their money. Hopefully on the way, you can explain to them the importance of saving some of it as well.

One of the most important things you can do for your children is teaching them how to save their money. In this world where all forms of media encourage spending everything you have to get the next new thing, in many families this is a lost art.

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Not only do children need to be given money to learn how to buy and even sell, they need to be given motivations to save their money. As soon as your child is old enough to understand that items have a varying monetary value, he is able to understand the importance of saving.

The best way to teach your children to save money is showing by example. If the family would like a new living room furniture set, like the Modern Leather Sectional Sofa with Recliners, which is understandably hard to resist, instead of buying it on credit, have a garage sale and earn the money before purchasing it. When children see by your example the best way to use their money, they will naturally accept that as the way things are done. Here are some USDA home loans reviews which showcase best practices.


It is vital that children learn the proper way to use credit cards, if used at all. So many children grow up thinking that everything a person wants can be purchased with a credit card. Many times they don’t realize that the item is not paid for at the time of purchase.

Children need to understand that credit cards and credit accounts merely give you a longer time to pay for the item, but you will usually end up paying more in the long run. They need to understand that it is always better to save for the item and then purchase it rather than pay more just to get it immediately.

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A great idea to teach your children sound financial habits, is to help them budget their money. Many families will use the envelope technique. Give your children several envelopes, and have them write one thing they want to save for on each envelope.

Some families may also want to set an envelope aside for charity. Remind your child about upcoming events they might want to save for such as summer camp or a family vacation to a theme park.

Write a percentage on the outside of the envelope according to how much of each dollar needs to be allocated to the savings goal. As your child earns money, help him divide it up according to the percentages. This reinforces math skills while teaching good money saving habits.

Some ideas to have in mind when setting guidelines for a savings budget:

* Suggest savings goals, don’t force them.
* Set small savings goals at first
* Praise your children for reaching their savings goals

A great lesson on saving money is preparing for your child’s college expenses. This is a huge burden on most families, and starting early will greatly benefit both the family budget and the child’s perspective.

Saving for college will keep the idea of going to college in the forefront of their minds, and help them to appreciate the privilege of having a good education. It’s a good idea to open a savings account for the child specifically for saving for college, as well as looking into a 529 college saving plan.

While children need to be taught to save their money for the things they wish to buy, they also need to understand that they will not be able to have everything they want. It is important to express to your children the things you would like to have but can’t afford.

Show by example how to accept the unattainable and be content with the possessions you do have. Don’t complain about lack of money, but comment on how thankful you are for the job and salary you currently have.

If your children do not learn early how to save their money and invest it wisely it will be much more difficult to learn later once bad habits are formed. While it’s not a good idea to control your children’s finances completely, guidance and a good budget will go far in forming good money practices.

Your children will thank you for being wise parents in teaching them the lost art of saving money.
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Reprinted with permission.

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