Five Best Practices for Encouraging Kids to Save

How can you help your children become responsible savers? It’s an important question. As with so many good habits, the earlier we start cultivating good saving behaviors, the easier it can be to maintain them throughout our lives. Here are five suggestions for ways to put your kids on the right track for a lifetime of disciplined saving:

Talk about money — You’ve learned a lot about money over the course of your own financial journey. Give your children the benefit of your experience. Teach them the lessons you’ve learned about saving, budgeting, and spending.

• Let them earn on their own — The old-fashioned weekly allowance is a great way to show the connection between work and income. It can also build good work habits and help kids clarify their spending priorities.
• Open a savings account with them — Opening a savings account for your child can teach them about the power of accumulating interest and cultivate solid account management behaviors as they monitor their account balance.
• Set savings goals — Saving can be easier when it has a purpose. Setting a savings goal can help children learn to avoid impulsive purchases and acquire the fiscal discipline that will be a big help as they look to future financial priorities like tuition, housing, and transportation.
• Lead by example — When your children see you following the same good habits you encourage in them, they’re more likely to internalize those lessons and act on them. Don’t forget to practice what you preach. Give your children the gift of a solid head start on saving for the future. Encourage them to follow the savings behaviors that can help them lead a more financially stable life.

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