As adults, we’re all too familiar with the importance of maintaining a healthy savings account. From medical bills and home repairs to higher-than-normal utility costs, unplanned expenses seem to be lurking around every corner. As unpleasant as these costs may be, the time to start planning for them is not when they happen, but rather, before. For adults, this tip is all too familiar. Yet how can we, as proactive parents, teach our kids the importance of saving? Forming this worthwhile habit is simpler than we may think.
Consider these three tips:
- Create an allowance system.
The concept of earning an allowance is nothing new. But how many parents really use it to empower their children to make wise money decisions? Allowances can be great ways to not only motivate children to perform weekly chores or side projects, but to also save for a much-wanted item. Allowing children to earn extra money by helping out more around the house can help them learn the process of working hard to save for an upcoming expense.
- Invest in a piggy bank with compartments.
Let’s face it: our kids aren’t the only ones who deal with the “hole in our wallet” syndrome. It seems that whenever any of us get paid, too much of that cash escapes quickly. Purchasing a piggy bank with compartments is a great way to help your children hold themselves accountable for where their money is going. Compartmentalized piggy banks allow children to put money into a “savings,” “donations” and “spending” compartment. Not only can they visualize how much money can be saved over time, it also facilitates the development of a “savings” mentality whenever they earn money.
- Discuss (and do!) what you preach.
As parents, we so often fall into the habit of setting up guidelines for our children, while failing to have regular conversation with them about why these guidelines are so important. As you embark on helping your child get into the routine of saving money, don’t forget to have regular conversations with him or her about the savings process. Follow up with him/her at the end of every month and ask them how much money has been saved or if he/she is saving for any special item. Also, let your child see you in the act of saving too. Take him/her to the bank with you and even discuss expenses that your savings account helps to cover.
As with any healthy habit, changes take place gradually, not overnight. Be patient with your children as they learn the importance of saving. And don’t forget how powerful open, honest communicating can be when it comes to really demonstrating why saving matters.
This is a guest post. Northwest Georgia Bank is a community bank that proudly serves families in the North Georgia and Chattanooga communities.
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