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Increasing your Financial IQ

3 Ways to Introduce Your Kids to Saving!

Money Magic

Saving for the future is important, and getting your children into the habit early is a great idea! Talking about money can be stressful, but you can make savings fun for your kids, no matter their age. Just follow these tips to help your kids learn about savings!

Help them save for a toy.

A popular approach to getting young kids involved with money is to have them save for a new toy they want. This can be a good way to introduce the idea of savings and to teach them to plan for something. Reward your small child for doing their chores, or picking up their toys, and have them save the money in a jar or piggy bank. Each week, you can count the money together. Once they’ve saved enough for the toy, you can talk to them about what it was like to save money and move to the next step.

Introduce emergency savings.

Life throws lots of surprises at you, many of them financial: the refrigerator dies, the radiator on the car goes out, or something starts leaking. If you have an emergency fund, you’re ready to deal with these surprises when they happen. Because this fund is so important, it’s a good idea to introduce the concept to your kids. Once they understand the basics of saving for something, use examples to explain why saving “just in case” is important.

Set short- and long-term goals.

Once your children understand how to save and why emergency funds are important, you can help them start saving for their own goals. Ask your kids what they want in their future and help them create a plan to save for it. Whether it’s a toy or college tuition, learning to save now will mean a smoother transition to adulthood later on.