Teach Your Children How to Save
By teaching children how to save for their goals, they’ll have one of the most difficult aspects of saving under their belt by the time they are teens – being consistent savers.
Here are just a few examples to help teach children of different ages about the savings game:
- At the grocery store, let your children help you shop. Teach them how to comparison shop. For example: show them that for every $4.99 box of cereal, there may be similar brands on sale for half as much.
- As they get older, let them know what things cost. Share sales receipts and bills that you receive for items or services you’ve purchased for them.
- If you decide to pay an allowance, include them in the decision. Discuss allowance amounts and what they should use their allowance for. The amount is your call, but allow them input. One idea is to have children set aside part of their allowance for spending, part for saving, and part for sharing. Clarify what you’ll pay for and what they should be responsible for.
- Show children what compounding interest means. Explain that as they save, they’re constantly earning dividends on their savings. On top of that, they’re earning dividends on their dividends.
- As they reach high-school age, clarify what you will pay for and what your children are responsible for. For example, they may want the newest cell phone that comes with a really high price tag. Establish your spending limit. If they still want the more expensive version, have them make up the difference.
Get your children started right financially. Bring them into Emery Federal Credit Union to open their own accounts, and we’ll help you raise them to be fiscally savvy.
Copyright 2012 Credit Union National Association, Inc. Information subject to change without notice. For use with Members of a single credit union. All other rights reserved.