Kids Saving Money

Kids get the idea of spending money. Nearly all of us - parents and kids alike - are surrounded by the opportunity to spend money every day. Kids see Mom and Dad spend money at the grocery store, on gas or on going out to eat. They are also plenty of advertisements to entice them with things that every kid must have. But what about kids saving money? Are there the same options to teach them about that?

In general, kids saving money doesn't seem to come as naturally to them as spending (unless you have a born saver like my daughter). Frankly, it just isn't nearly as fun to teach either. The rewards for saving do not have that same immediate gratification as a new toy (which is the point, of course) and it's not nearly as entertaining. Complicating it all is direct deposit and the fact that most savings deposits don't require a trip to the bank for you to teach your kids about savings. What is a parent to do?

Start slowly. Get a fun bank - piggy or otherwise. One of my favorites is having a child paint their own ceramic bank. We have local paint and glaze stores with banks ready to paint...plus all the paints and stencils to go with it. Then they fire and glaze the masterpiece for you to pick up later. If your child is old enough to finger paint, they can do this (with varying degrees of help from Mom or Dad!).

Encourage your child to put part of their money into their personal bank. Don't worry about getting to the "real" bank just yet. Kids need to be able to see, feel and count their money at the outset. It is theirs after all - and there is a sense of pride that goes with that. You can also start a family bank or money jar. Parents can then put their coins into it at the end of each day. While it's probably not the majority of the family savings, it still helps kids see that saving money is something that everyone in the family does.

Start talking about going to the bank and how money gets there - and comes back to you - each time you visit the bank. This is true even if your visits are limited to ATM trips. Help your child understand that you can get money out of the bank if you put it in first by saving it. If your child is older, you can start talking about loans, but that is probably best left for the future...one step at a time on our road to money education!

When your child seems to understand how "your" bank is different from "their" bank, consider opening a savings account for them. You will likely have your name on it as well since your child is a minor, but the bank is usually good about helping with all those details. One key here is not to rush it. If your little Warren Buffet has all kinds of money that just isn't safe in the house, then you may want to move along faster. But, generally, there is no need to rush this part of the process. It is much more important that they grasp how to save rather than where to save.

With kids, saving money is a great step for their financial future. Getting started down that path now is an investment that will pay off for years to come.