Teaching Kids to Save

Savings levels in the United States are at all-time lows, which may make it extra hard to teach our kids to save. Below are some tips to help kids learn financial terminology, and save for something. Great way to teach lessons on earning and budgeting, without just buying the item. Teach Children to Save Day coming up on April 25, 2006. Q: What is a 401 (kids) program? Based on a 401(k) matching plan that many employers offer. Consider matching 50 cents for every dollar your child saves. If your budget allows, consider matching 50 cents or $1 for every dollar your kid earns or receives as a gift. Q: How about an example? If your child earns $20 a month in allowance, match it with $10. Encourage them to earn extra money by babysitting or helping others with odd jobs. If they earn $20 babysitting, reward the hard work by matching the savings with $10. If they decide to save the entire amount of a $25 birthday check from a grandparent or relative, consider the many ways she could have spent the money when deciding how much to match. Your child`s savings will add up much more quickly and you can teach lessons on earning, budgeting and sacrificing. After she purchases the item for which she`s been saving, consider continuing the program and putting the money into a savings account at the bank, where it will be safe and earn interest. Teach them that earning interest on your money is saving without the effort. Q: What are some other quick ways to help kids save? Encourage them to: Write down savings goals and keep them in a place where they can see them. Put savings in a separate place, either a savings account with a bank, or a special box. Save money by bringing lunch to school. Put spare change in a jar at the end of the day.