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Teaching Kids Under 13 The Value of Saving and Setting Financial Goals

  • 07-12: Young Kids
  • May 2024
  • Premier America
Today financial literacy is a crucial skill that often goes under-taught, especially among young children. We believe in the power of starting young to foster lifelong financial wellness. Educating your children about savings and financial goals is not just about teaching them to stash away spare change; it’s about setting the foundation for wise financial decisions in the future. Many financial educators and researchers advocate for the early introduction of savings habits, and this blog aims to guide you on how to instill these essential skills in your children effectively.

Give Them the Opportunity to Manage Money 

Financial responsibility can begin at an early stage. Children as young as five can start learning money management if given small amounts of money, like an allowance. Here’s how you can use allowances to teach important financial lessons: 
  • Encourage Wise Spending: Teach your children to spend a portion of their allowance while saving the rest. This practice helps them make thoughtful decisions about their purchases, prioritizing what they really want or need.
  • Set Savings Goals: Whether it’s a new toy, a video game, or the latest gadget, help your children set savings goals for items that catch their eye. This not only teaches them the value of money but also the reward of saving for special purchases.
  • Celebrate Their Success: When your children successfully save and purchase something they’ve been wanting, celebrate their achievement. This positive reinforcement encourages them to continue being thoughtful about money. 

Set Reasonable Limits

Setting boundaries is key to teaching children the value of money. Here are some strategies to implement: 
  • Create Spending Categories: Establish categories for spending and saving and guide your children on how much they can spend and how much they should save. This helps them understand the balance between immediate gratification and long-term rewards.
  • Teach the Future Impact: Explain how saving money now can benefit them in the future, making the concept of "saving for a rainy day" more tangible and meaningful. 

Help Them Learn Patience 

Patience is a virtue, especially when it comes to financial matters. Here’s how to encourage it: 
  • Split Money Management: Allow your children to have control over some of their money, with the agreement that they save a fixed percentage. This teaches them to delay gratification and plan for bigger rewards. 
  • Develop Positive Habits: Use these early experiences to talk about the dangers of impulsive spending and the benefits of patience, setting them up for healthier financial habits as adults.

Talk About Family Finances 

Openness about finances is instrumental in teaching kids about money management: 
  • Involve Them in Discussions: Let your children know about the financial decisions you make as a family. Discuss what things cost and why choices are made, such as budgeting for necessities vs. luxuries.
  • Model Good Behavior: Children learn by example. Show them how you manage the family's finances responsibly. This includes demonstrating both what to do and what not to do with money. 
Teaching your children about saving and financial planning is an invaluable life lesson that can lead to significant benefits as they grow. By starting these conversations early, you’re not only preparing them to manage their own finances wisely but also instilling a sense of confidence and responsibility towards money. Let’s empower the next generation with the tools they need for financial success. Start the conversation today and watch them grow into savers and smart spenders! 
Youth Smart Savings
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