Kids often ask parents to purchase new toys, games or gadgets. Instead of pulling out your wallet, parents, use this as a learning opportunity.
By age 6, most kids can understand the value of money and save for financial goals. Educating kids about good money habits at a young age can help them grow up to be financially independent adults. Work through these six steps with your child to teach them how to set and achieve their savings goals.
- Identify a specific goal. What item does your child want to purchase, and what is the cost? Ensure the item’s price is achievable. Establishing a well-defined goal will help them track and measure progress and motivate them.
- Determine how they will earn funds. Brainstorm ways your child can earn extra money to help them pay for their item. Examples could include extra house chores, helping neighbors, etc. Consider the money they’ve already saved as you figure out how much they will need to earn.
- Set a deadline. Grab a calendar and select a realistic target date to achieve their savings goal. Consider creating smaller goals within that timeline to help things feel more manageable. For example, if their deadline is one month away, make weekly savings goals to help them reach their more significant goal.
- Open a Youth Club Account. If the money is easily accessible, they may be tempted to spend instead of saving. We offer two youth account options for our younger members based on their age to help them manage their money now and down the road. Thus, as they earn money, have them deposit it into their account.
- Track their Progress. Work with your child to create a progress chart and hang it on the refrigerator. As they achieve steps to reach their goal, mark it on the chart with a sticker. They will see their progress daily and feel encouraged as they continue their savings journey.
- Celebrate their win. Once they reach their savings goal, ensure they purchase their item. Give them positive encouragement and talk through their savings journey. Answer any questions or concerns and challenge them to set a new savings goal.
Looking for additional ways to educate your kids about saving money? Check out these four fun ideas that can involve your whole family. Not a member of Members 1st? Open an account and join our faM1ly of nearly half a million members strong.