1. Model savings behavior...
So your kids can copy some of your good habits -- and not just the bad ones! Manage household finances using envelopes or jars to organize your monthly cash for groceries, utilities, transportation, entertainment, and housing expenses. Or simply have one savings jar for a vacation or other fun goal.
2. Give allowances in coins or small bills...
So kids can immediately earmark money for savings and money for spending. Gift them a special piggy bank, or decorate a jar for long-term savings. Give them a small wallet for spending money.
3. Always save some gift money...
If Grandma sends a cheque or cash for special occasions. Start by teaching kids to save at least 10 percent of the gift money.
4. Teach compounding interest...
To older kids (who prefer to spend money now instead of saving it for later) how compound interest will make their money grow over time. Visit the Ontario Securities Commission’s Get Smarter About Money site to brush up on your compound interest calculations.
5. Post pictures of savings goals...
To remind your child what they’re saving for. Whether it’s an electronic game, a special outfit or skates, post a picture on the fridge so they have a constant visual reminder of their goal.
6. Chart savings progress or offer rewards...
For long term goals by creating a colourful Savings Chart. Reward progress with stickers. Older kids may prefer other rewards, like choosing a favorite Friday meal, extra screen time, or delaying bedtime by a half hour.
7. Assume the save...
From their very first allowance or part-time job. It’s easier to start this with preschoolers, but be firm with older kids as well.
8. Match their savings…
To encourage long-term savings for significant goals such as buying a computer, or first car, or even to encourage saving for post-secondary education.
9. Open a savings account...
And introduce your kids to banking at a credit union. Whether you prefer to bank in person or online, opening an account like Meridian’s Good To Grow High Interest Savings Account is a great opportunity to teach kids about banking and saving at the same time.
10. Make it fun!
Inspiring kids to save money may be challenging, but it can have a life-long impact on their financial health. Make it fun by teaching savings and money concepts using traditional board games like Monopoly and the Game of Life.
Not every savings tip will work for every child, so learn what motivates your kids and get started on this important money lesson.
For more ideas on encouraging kids to start saving, visit your local Meridian Credit Union branch and speak to one of our knowledgeable advisors.
