How to Teach Kids to Save Money

Label 4 jars (or piggy banks) with the words "give", "long-term savings", "short-term savings", and "spending".

Give
Label the first jar "give". The money that goes in this jar if for your child to "give" to charity.

Long-Term
Label the second jar "long -term savings". The money that goes in this jar is for your child to save long-term. This money should never be touched. The goal is for your child to save this money until he or she reaches the age of retirement.

Short-Term
Label the third jar "short-term savings". This money should only be used on things that they are saving up for, such as a new bicycle or a car when they reach the driving age.

Spending
Label the fourth jar "spending". This money is their spending money. Teach your child to budget this money and to spend it wisely. Once their "spending" money is gone, do not let them use any money from the other 3 jars.

Savings Tip
Every time your child receives money (i.e. birthdays, Holidays, allowance), have them put 10% in the "give" jar, 10% in the "long-term savings" jar, 10% in the "short-term savings" jar, and the rest in their "spending" jar.

A great savings motivator is to "match" your child's savings. For example, you can offer to give them $5 for every $5 they save. This reward system will encourage them to save their money even faster.

Another option is to offer to pay them interest on the money they save. For example, give them 50 cents for every $5 they save. Not only does this provide extra incentive, but it also helps to give them a basic understanding of the concept of interest.

A third option is to set a savings goal that will reap a small reward once they reach their goal.

Worksheet
Have your child track their allowance on a worksheet.

Savings Chart
To encourage the learning and savings process, have your child make a savings chart so they can record their savings and see it grow. The chart will be a visible reminder of what they have achieved and what they still need to achieve. Place this chart on the refrigerator or in their bedroom. You can have them set a savings goal on the chart and add a sticker or offer a reward every time they reach their goal.

These are cool binders for keeping track of savings, investments, money charts, financial statements, budgets, and other money related matters. Click on any product to purchase from Zazzle.

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