kids savings accounts

5 Tips to Teaching Your Teen to Save Money

Posted on 30. Jul, 2010 by admin in Kids Savings Accounts

Understanding the value of a dollar is not always easy for teenagers these days. There are a lot of expenses that come along with being a teen and kids want to be able and have fun new gadgets and toys along with their own independence and ability to choose items on their own term. Unfortunately, teens do not always understand the value of earning and the lessons that come with it once the money is all gone. Most teens rely heavily on their parents for spending money and don’t concern themselves much with their financial standing. This is where parents play a vital role in teaching your teen to save money and spend it wisely.

As early as age 5 kids can begin to learn the concept of money and investing. You can start by giving them a simple piggy bank in which they can grow into a starting amount for a kids savings account at a local bank or credit union. By preparing kids to understand money management, they will develop into financially responsible teens and adults.

Here are a few tips you can teach your teen how to save money:

1. Start teaching your kids about money as early as you can - show them different coins and dollar bills and have them watch you as you pay for items at the store. Every now and then, allow them to pay for something with money and they will slowly begin to understand the concept. Show them which items are necessary and which are not necessary and explain to them the choices you have to make with money. Be consistent and explain to them in simple ways on a frequent basis so that the process becomes natural.

2. Once they have the basics of money down, its time to start teaching them the value of saving money. Using a piggy bank or a savings account for your child or teen is a great start. You can give them a small allowance or pay them for certain chores they do around the house. Encourage them to save their money for items they really want.

3. As your child grows or participates in more chores around the house you can increase their allowance. Start by giving them a weekly allowance and be constant about paying. Make sure that you take time to sit them down , go over the items or chores they completed and give them the amount the earned each week. If they missed chores or did not earn an allowance for the week, explain to them how this will effect their savings. They will allow them to learn about losses and gains and make them understand that money just doesn’t float freely from the trees.

4. Motivate them to earn more money and save it. As your child grows into a teen, the demands of money will become increasingly substantial. Encouraging them to work harder for extra money and for the items they want will teach them valuable life lessons that they will carry with them into adulthood.

Always maintain a positive and supportive role when it comes to money otherwise the idea of saving money can quickly turn into something dreaded for you both. Try hard not use allowance and money as a punishment with your teen. You want kids to learn the value of money and the independence along with it. If you take your child’s money away, the lessons learned do not coincide with idea of working hard and saving money wisely. Instead it becomes a tug of war between kids and parents whereby the lessons learned quickly become diminished as do their values for money management.

5. Give your child more freedom and more flexibility with their money as they grow up. Money their money from a piggy bank to a childs savings account where they can actually go to the bank and deposit their money on a weekly or monthly basis. Allow the bank to teach them about earning interest from their savings and encourage them to be consistent with deposits. Once your teen is old enough you might even consider getting them their own checking account or debit card so they can make purchases themselves. Just remember that their money is their money and regardless of what they buy, and as parents you need to respect their decisions and hope that your teachings and lessons were learned.

Teaching your kids the value of money management and savings is a long road and an ongoing one. Maintaining consistency and encouragement is vital to your kids views on money. If you are just now starting to your kids or teen about money its not too late- its never too late. Start from the basics, be patient and look for creative ways in you can relate the value of money to everyday activities and habits.

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