I have recently blogged about 8 ways to encourage children to be frugal over at A Thrifty Mum, which has got me on the whole money management with children bandwagon. I find that using practical examples really helps the boys understand money and finances, but one of the things that I find really hard is how to encourage the boys to save for savings sake. After a chat on The Mad House facebook page I realised that I was possibly asking too much from them to save for savings sake. However, I did get some great ideas of ways to encourage your children to save rather than splurge.
Give children a goal to save towards, something that really sparks their interest and motivates them. Create a chart to help them tick off the pounds/pennies until they reach their target – Ramblings of a suburban mummy
Teach children the different denominations of money and what they add up to. This helps her understand what spending each coin means – Verily, Victoria Vocalises….
Work out how much they need to save each week to buy a special something before a certain date, and then they can see that they have some money left, but they also get buy their big item. It’s just small scale practice for when they’re adults wanting a car, house or holiday – The Brick Castle
Pay “interest” on what he’s saved that month. So if they save all month he can get something bigger – Snaffles Mummy
Make it visually – Using a glass jar or even a money box that counts the money (like Cass from the Frugal Family) makes saving money much more tangible for younger children. Or even have a savings chart with stars and stickers.
Set regular savings goals – Incentivise saving by offering added rewards at regular agree set points. This is why the Pigs from Natwest really worked back in the 80’s
Pay interest – pay your child monthly interest on savings they have. not only does this encourage them to keep it saved for longer, but it teaches them about money management
Set a goal – Are they saving for a specific item? if so make them a chart. Encourage them to find inventive ways to earn money to help them achieve their purchase faster
Insist that a percentage of their pocket money goes into a long term savings account.
Discuss the reasons that people save. By setting an example you are giving them the best lesson ever. My boys are both very maths oriented and we discussed how a Sippdeal SIPP pension works and why it is important to be able to look after yourself when you no longer have the ability to earn money.
We also set aside so much money each month for fun family activities, showing that you do not need immediate gratification and that by planning, saving and managing our money we can all have fun.
Open a bank account with them and actively use it. Make sure it is a book account, so they have to go in to a branch to pay in and take out their money. This way they have to plan spending within banks timescales and again learn that spending is not about instant gratification.
Save smaller denominations to demonstrate how every penny counts. The boys both have a large vodka bottle that they fill with pennies and once a year they exchange it for holiday spending money. It really adds up and Mini is always on the lookout for peoples dropped coins when we are out and about.
Teach your children that buying an experience (ie a trip to a theme park) brings much more happiness than a products (such as an ice cream). Saving for the experience may take longer or be harder, but it makes memories and makes the experiences so much better
Whilst chatting to people about saving and teaching children about money I came across some really great blog posts about it and they are too good not to share, Perle Noire wrote a super post on how she teaches her family about saving, Cat from Yellow days, uses money as a maths tool and makes learning really fun, Becky from Baby Budgeting and Family Budgeting is really worth following for her fab money saving tips too.