It's never too early to start teaching your children about money. Even small steps, like setting a good example with your own spending, can help improve the financial literacy of your kids. For example, stick to your budget, compare prices when you shop and regularly contribute to your savings. When you practice good savings habits, you're teaching your kids to save.
Savings tips for kids vary based on the ages of your children and their savings needs. You'll also want to consider where they will be getting money and how much money they have to contribute to savings.
Allocate an allowance in exchange for chores around the house to teach your kids to save. For young children, it's a way to practice good saving habits and learn more about where money comes from. For older children, it can teach them the value of a budget, living within their means, saving and even giving to charity.
When allocating an allowance, consider using age as a baseline, starting at one dollar per year of the child's age (e.g., $8 per week for an eight-year-old). Pay their allowance in small bills so it's easier for your children to budget for expenses, and encourage them to put at least a dollar a week towards their savings account.
Encourage your children to set aside money in their savings accounts by setting attainable goals with small rewards when they deposit the money in the bank. You might want to adjust the rewards as they get older, but consider the following ideas for young children:
Encourage good saving habits in older children by helping with bigger purchases. If they can save the majority of the money for a new computer, volunteer to pitch in that last hundred. This will motivate your teens and show them you're interested in their hobbies.
Teaching children about saving money goes hand in hand with teaching them about earning money. You could choose to set up an allowance system, or encourage them to be young entrepreneurs. You might even choose a combination of both ideas. Here are some practical ways for young kids to earn money:
When that piggy bank starts to fill up, open a joint savings account with Citizens Bank. A savings account allows your children a safe place to set aside gift money and money they earned through allowances and odd jobs. As they get older, you could encourage them to contribute to a college savings account. For more information about our savings accounts, call 1-877-360-2472 or open a savings account online today.