Ways of Saving For Children

27
September

Did you know that a hundred dollars invested at the age of 20 can turn into thousands of dollars later in life? Imagine if your kids invested a hundred dollars at the age of 8 or 9. Later in the life, that amount could even turn into a million dollars for your kids if invested properly! Teaching children how to save money is a skill that will stay with them throughout their lives. If you are a parent seeking to teach your kids the value of a dollar, then read on for tips on teaching kids how to save money.

For younger kids ages 3 to 6, it is important to make the idea of saving money something that is easy and fun. Piggy banks are a great starting point for kids this young. There are even various types of piggy banks designed to make saving money a fun task for very young children. If your child has a favorite animal, why not get him or her a bank in that animal shape?

You can keep young kids motivated to keep saving up their pennies by promising them a trip to the dollar store. The main point is to be sure you are encouraging children to save money and rewarding them. It is important to use positive reinforcement at this age, since it is such a developmental stage for children. In addition, experts often say that as soon as your kids can count numbers, they can start learning about money. Why not teach your kids about money as soon as they can count?

It is also important to teach children how to have goals they can someday achieve. Young kids can set goals by printing off a picture of something they wish to someday purchase and taping it on a piggy bank. The idea of always having a goal is something that will follow kids even when they are old in age. Goals also encourage children to be responsible individuals.

As kids start getting older, there are possibilities for teaching them great saving habits. If they get an allowance, then there are ways to encourage them to save their allowances. To teach them about earning interest, a parent could even demonstrate this by allowing kids to earn interest for every dollar they save at home. Also, kids will be racing to calculate how much compound interest they can earn!

If children ever ask about opening a savings account at the bank, be sure to honor this type of question. Take the time to explain the process of opening a bank savings account. Did you know that children as young as 8 years old can open up savings accounts? You can get your child off to a great future by having him or her open up a savings account at the local bank. This will also teach a child how to be financially independent.

It can also be wise to show children how easily money can be spent. By offering small loans to children, a parent can show how quickly the interest can build up. Children learn quickly that taking out loans can be financially risky with this type of experience!

As children approach their teen years, it is also wise to teach them about the stock market. Be sure to take the complex stock market world down to their level. Show them that they can buy a portion of companies they already know about, such as Target or McDonald’s. You can also show kids how dividends work, which may motivate them even further to do some investing in stocks. This will prep kids for later in their teen years, when they may have their first real world job. In addition, there are many online stock trading companies that can allow children to invest only small amounts of money in companies.

One last tip is encouraging kids to always be aware of their saving history. Provide them with an envelope system to keep track of their expenses on a month to month basis. Sit down as a family ever 6 months and go over what went well and what did not go so well. This type of activity can even bring the family closer together!

It is important to teach children about saving money at an early age. The habits they develop at a young age can easily follow them into their adult years.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

Email  • Google + • Twitter

Comments are closed.