Teach Children to Save
05/15/20
It’s important to get started on the path to financial success when you’re younger. That’s why we love visiting our local schools and teaching kids financial wellness. We know we are making a positive impact on how they view their finances now and in the future. But what can you do to help teach your kids how to save and the importance of saving their money?
An integral part of teaching children to save is explaining the difference between needs and wants. Most children do not think about needs because those have already been met by their parents or guardians. Instead, they think about all of the fun stuff they want. That is why it is important to begin teaching them the distinction between needs verses wants at an early age.
An easy way to explain “needs” to children of all ages is to sum it up into one small statement. A need is what someone must have today in order to live a safe and healthy life. This includes food, water, shelter, clothing, electricity and other basic necessities.
A “want” is what a person spends money on for pleasure or enjoyment. “Wants” can include taking a vacation, going to see a movie, or purchasing toys or electronics. None of those things are necessary for a person’s survival today but are worth saving for to enjoy in the future.
Empower children by giving them an allowance each month and helping them understand how to manage it. If they want an item that costs more money than they have, seize that opportunity to teach them about savings and budgeting. Create ways to help them watch their savings grow so they can visually measure their financial success. For younger children, a great way to achieve this is by having them put their money in a clear piggy bank or container. Each time they “make a deposit,” they will see their savings grow. For older children, open a savings account and teach them about interest earnings by reviewing the periodic bank statements with them. Centennial Bank has a savings account that’s perfect for young savers. Open an account online or stop by your local branch to meet with a customer service representative.
With an early start on saving and an understanding of budgeting their money, children will develop money management skills that will provide them with a solid foundation for their future. Start saving today!
Follow this link to access financial literacy resources for children of all ages. https://www.aba.com/advocacy/community-programs/consumer-resources/kids-money