What Do You Think?The doorbell rings and Mom opens the door to find the paper carrier collecting for the Sunday paper. "Julie," she yells, "can I borrow $5.00 for the paper?" Julie answers, "But Mom, that's mine and you're always using my money. That's not fair, it wasn't easy to save that money." (See end of newsletter for a possible answer.) |
Why do you save money? Do you save for something special or for security? People have different reasons why they save and children are no different.
One child may save money easily while another will want to spend every penny he or she has. However, you can encourage your child to start saving even if it's just a small amount.
One important concept is to teach children to pay themselves first. If they can learn to put a certain amount of money into savings before they buy anything at all, they will be well on their way to wise money management.
Learning to Save
Children need to have both short- and longterm saving goals. An example of a short-term goal might be a new toy or pizza with friends. A long-term goal could be a trip to an amusement park or a new bicycle.
Children will have trouble saving money for something like college (which is too long for them to wait) or just to have money in case they need it.
Teaching Saving Habits
- Help your child set realistic goals that still leave some money to spend. Hoarding money doesn't teach money management.
- Consider matching amounts of money your child puts into savings.
- Let the child spend saved dollars when he or she reaches the agreed upon goal.
- Take a trip to a financial institution and assist your child in opening a savings account if he or she doesn't already have one.
- Talk to your child about interest. The child needs to learn money can grow into more money if saved and put in the right places.
Saving for the Long-Term
Children will find it easier to save if they have a goal. Help your child answer these questions to get started on saving money.
What do you want to save money for? __________________________________________
How much money can you save each week? _____________________
If you save that amount, how much will you have:
in 4 weeks? ___________________________
in 8 weeks? ___________________________
in 12 weeks? __________________________
in 6 months? __________________________
How long will it take you to save enough money for your goal? ____________________
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Reprinted with the permission of the Iowa State University Extension. © 2008 Iowa State University Extension.
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