While giving your child an allowance each week for sticking to the chore chart is rewarding, it is important to integrate lessons on why it is so important for them to save their money.
It is never too early to repeatedly remind your children about the importance of money. According to an article by Forbes, children as young as three years old can grasp concepts such as saving and spending and that a child’s money habits are formed by the age of 7.
But because the topic of finances can easily put your children in a day dreaming state of mind, here are some creative ways to educate your family on the life benefits of being a savvy saver:
Let Them Do The Shopping
Taking your children to the supermarket can be a money lesson. Between the ages of 3 and 5 children start to grasp the idea of what things cost. Give your children a crisp $5 bill and tell them to pick out fruit or vegetables for the house. As they pick their food of choice, tell them how much they have left. Allowing them to seriously think about their decisions will not only give them a sense of responsibility it will give them an opportunity to get creative in what purchases they can make.
Delayed Gratification
As your children understand that in exchange for doing weekly chores around the house they are rewarded with money at the end of the week give them a reason to save. When children are five years old the idea of “saving money for college” is too abstract for them and they may lose interest in the reasons why they are saving. Instead, purchase a toy or game they have been wanting and put a dollar price on the item. This will motivate your children to save up to buy their treasure from you. It not only gives them a goal to work for it teaches them the reasons why they are working so hard. (Tip: in order to avoid frustration, choose an item that will only take a few weeks for them to save for.)
Saving For A Good Cause
After your kids understand why saving is so important, try for one month having them save for something altruistic and meaningful. Go online with them and research a local organization or cause that they are interested in. If your children love animals, look at a local rescue shelter. If they love the outdoors and nature, find a community garden or environmental conservation group. Explain why these groups need support and how they could help. Then, for one month, have your child save their allowance to donate to the cause they chose. Maybe have them decorate a special savings jar to remind them why they are saving. At the end of the month have your child hand deliver their money to the group of their choice. It will not only empower and humble your children, it will teach them to remember that no matter how successful they become it is important to always give back.