Is it ever too late to teach our children about saving money?
Tuesday, July 7th, 2009 at
4:50 am
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Tagged with: Bank Books • Banks • Binder • Couple Times • investments • Money System • saving money • Sit
Filed under: Money Saving Tips
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Step1Find a bank where your child wants to bank. Consider online banks as well, as your child will probably be more comfortable with these institutions and more excited to save. Open their account(s) and name the 2 sections–the first should be "Long Term" and the second should be "Savings."
Step2Every time that a child receives money, no matter the amount, talk to them about breaking the money into thirds.
Step3The first third is to go into the account they mark "Long Term." This is money that they will be saving for college or post-secondary life.
Step4The second third is to go into the account they mark "Savings." This is the money that they will use for items that will require larger sums–perhaps a new bike or name brand clothing–anything that will require pooling money over time. Have them note what they paid for when they take money out of this account.
Step5The third amount is "Now" money. They can do whatever they wish with it. Spend it, save it–whatever they question. Leave it really up to them. That freedom will make the initial feeling of loss (of the first two-thirds of their money) feel less constricting.
Step6Have them keep track of all 3 amounts in their section of the Investment binder. This will help them see: that even small amounts are valuable as they grow into larger ones; that they are construction towards their long-term future while compelling care of small-term wishes and today’s "I need it" item; and that keeping track of the "Now" money spent will encourage your kids to see what they’ve spent over time. This can be a real eye opener. Just as seeing what they spent their "Savings" money on–they can later review the buy and talk about whether it was worthwhile, in hindsight.
Being open about money will mean that your kids may question you about your money and what you’re doing with it. It’s an opportunity to have discussions that outline what type of money responsibilities they will have when they are adults.