Starting when they are very young is the best way to impress upon them the wisdom of saving.  Suppose your third grader wants something that exceeds the amount of the allowance she is given.  Take time to explain that if she saves out a little each week the item can be purchased. Help her do the addition so that she can see how long it will take with various amounts.  Show her that the more she saves, the more quickly she will be able to buy what she wants.

As children grow older, their allowances increase.  When your child becomes a teenager she will likely want something more expensive, like a car.  She will have to find a part-time job in order to do this.  For an important purchase like this you might even be willing to match her funds dollar for dollar.  This will encourage her to save. Again, illustrate to her how much faster she can get what she wants by putting aside more of her part-time wages. She will reap a fine reward when she has saved enough to have her own wheels! 

At some point your children should begin a savings account associated with a bank.  While they have already learned that saving up can get them things a single weeks' allowance cannot, they need to begin a long-range savings plan.  With a traditional savings account they can not only watch their money add up as they make deposits, but they get a bonus in the interest they receive.  Be specific about what the savings account is for, and don't allow withdrawals unless there is a dire emergency.  Savings plans of this sort are good for things like college expenses in the future, or for turning into money-market accounts as the savings add up.

Your best influence on your children's financial future will be when they see you taking care of your own money affairs with diligence.  Manage your own money well and they will have a fine example set for them.  

by Rachel Goodchild

Be first to comment this article

Only registered users can write comments.

Please login or register.