Child savings is a funny topic. Why would a child need to know how to save? It's like getting a child their first credit card at a young age.
It just so happens, these sort of money habits can carry way beyond childhood. It's just like teaching your child good eating habits.
Plant to the seeds of knowledge and habits now. Build your child's millionaire mindset and your child will reap the benefits throughout her entire life.
My parents never really taught me money management. All they really said to me was that "You need to save your money." They never explained why or how.
It's very important to teach child savings strategies. Just like us adults, it's pretty easy to have our money go through a revolving door right after we get it. As a society, we love instant gratification.
A child is the same way. Teaching her to save will teach her one important lesson.
We are an instant fix society. We want it and we want it now. Teaching your kids to save, and wait, will teach them how to delay gratification. Robert Kiyosaki, author of Rich Dad Poor Dad, says that this is a powerful trait of the rich.
So here are a few fun tips to teach your child about saving.
Depending on the age of your child, a child savings account is a great idea. If she's too young, ask your bank to open an account under your name but ask the bank associate to go through the motions of opening it for your child.
My brother and sister-in-law did this with my nephew (I think he was 6 at the time). The banker was polite enough to explain everything to my nephew: his own savings account, interest, and he even got his own ATM card.
He was so excited. They really catered to him. It was a great lesson for him and now he watches his money grow in his account.
If your bank just won't partake in this exercise, go online and open an ING savings account. You can show him his balance on the screen and even print out his statements.
Have your child build a dream board of things she wants to buy with her own money. Make it simple, maybe 2 or 3 items that won't break the bank. This will give them a goal to work towards.
Have her write down 3 good reasons why they are wanting the items on their board. This will help you and your child determine if the item is worth using the money she's worked so hard to save.
This also enforces delayed gratification. Sometimes the new fad fades and they change their mind.
Help them spend. It may sound counter-intuitive for this exercise, but spending money is as important as these money saving ideas. Besides, what's the use of a child savings account if it never gets spent?
You can help your child strike the healthy balance between spending and saving. Spending money lets them reap the rewards immediately while saving helps them focus on the future too.
Probably the best way to help teach your child to save is to save yourself. Children learn by example. I'm so amazed at how much my 22 month old picks up our habits.
So take your child to the bank. Let her see your deposit slip. Show her your statements and let her see the numbers. Be the example.
I learned this strategy in an interview I did with Kim Butler, a former advisor to Robert Kiyosaki. She said instead of giving your child 1 dollar, give her 10 dimes. Have her split her money between 3 piggy banks: Spending, Savings, and Tithing.
In her mind, 1 dollar can only go to one bank. 10 dimes can be split in different ways.
I hope these child savings strategies will spark some creativity on your end. It's never too early to start building good habits. Besides, it's better that they use their savings...than yours.
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