Teach the Value of Saving
There was a time when a Barbie Doll or GI Joe was all it took to keep the kids happy. In these days of technological innovation, coupled with instant gratification, kids want the same cell phones, iPods and other electronic gizmos as their friends. The best thing for you to do? Teach them the value of saving money, whether it’s for what they want today or as a lesson for their future.
If it’s true, as many believe, that our spending patterns begin to take shape when we’re as young as five or six, it’s never too early to start teaching money skills to your kids. Start with the basics when they’re young, and tackle more complex topics as your child matures. Here are some tips for the preschool and kindergarten crowd:
- Explain to them the value of money, starting with coin and paper denominations and their relationship.
- If they accompany you to the ATM when you make a withdrawal, explain that the cash that spills out is not “free”—it is money you have saved safely in the bank, for when you need it.
- Set a good example. Let your children know when you are saving for something special.
- Introduce your child to the idea of “collecting,” as a prelude to “saving.” A collection of the new state quarters would be a great start, providing lessons in geography and history as well!
- If your child receives an allowance, payment for chores, or a gift of money, talk about spending and saving options. Introduce the concept of “thirds”—one-third to spend, one-third to save for a short-term goal, one-third to save for a long-term goal. Let the child know how long it will take to save the amount needed for a specific short-term goal.
- Open a Millbury Savings Bank savings account in your child’s name, then encourage and talk about deposits that make the balance grow. Sign them up for our Superhero Savings Club, and let them earn prizes for making deposits and saving over spending!
- Explain that none of us can have or buy everything we might want, and help your child realize the difference between wants and needs. Let your child know that there are many things you “want,” too, but can’t afford to have.
- Check out kid-safe Web sites that offer user-friendly, age-appropriate financial facts and games your child may enjoy. The American Bankers Association recommends www.themint.org.
- Limit your child’s exposure to seductive commercials designed to stimulate artificial “needs”.
Remember, what you teach your child today will be the foundation for his or her financial future.