Passbook Savings Account

Encouraging children to save money is never easy and our culture of instant gratification certainly does not help. Unfortunately, our children are much more likely to get excited about spending money than saving money. With all of the marketing on TV featuring one toy or another, video games, and movies, it is impossible to shield our children from the “you need this” or “buy that” mentality. However, there are several simple ways to encourage children to save rather than spend. They just require some work on your part. But, with the right encouragement, these tactics could easily help your child in their transformation from your dependent child to a fiscally responsible, independent adult.

1. Open a Savings Account

Opening a savings account for your child can never happen to early. With the steadily increasing cost of college tuition and other costs, many parents even open children’s accounts before those children are born. However, if you have not opened one for your child yet, you should certainly do so. Encourage them to deposit as much money as they can into the account. If they have received money from relatives, suggest that they place a certain amount of that money into the account. If they have gotten money for their allowance or for mowing the neighbor’s lawn, encourage them to do the same. By the time they begin to work, saving money will be second nature to them. Make sure to share with them how much is in the account frequently as well as the interest they have accrued on their savings. This will encourage them to save all the more!

2. Match the Amount That They Deposit

Another great idea is to agree to match a certain amount of money that they save in their account with money of your own. You can match equal amounts, $1 for $1 of theirs. Or, if they are doing very well with savings and don’t need an exorbitant amount of encouragement, agree to match every $5 of theirs with $1 of your own. If they are having trouble saving, this is sure to encourage them.

3. Lead by Example & Save Your Own Money

It is common knowledge that children learn by example. Therefore, make it obvious to them that you are in the habit of saving your money as well. Take your children to the bank with you when you go to make a deposit or even keep your own piggy bank so they can see you putting money into it. A piggy bank is a particularly good idea with younger children who probably have one of their own. Also, make sure to let your children know what you are saving for. This way they will be able to connect saving money with future purchases and goals.

4. Set Goals

Every child wants a new toy or game. In order to encourage them to save, place a picture of the item that they most want where they can see it all the time. Another great idea is to place a thermometer next to the picture with the price of the item on it. Fill up the thermometer as they save money. When they reach their goal, make a big deal out of going to the store and getting the “prize” in question. This will certainly encourage them to save when they see how proud you are of their abilities.

5. Teach Them How To Spend

As important as it is to save money, some children become so focused on the saving that they forget to spend at all. One of the biggest wastes of money is small things. Too often we find ourselves spending money on useless things. Teaching our children to spend money on things we really want or need is also essential to maintaining good savings and enjoying it as well!

Tom writes about saving money for a top Australian reviews website, Money Choices. He also compiles unbiased overviews of various products and contributes to their blog.

Tags: child savings, children savings, children's bank account, saving money, saving money for kids