Apr 27 2010

Teach Your Kids to Save Money

 

1. Talk openly about money with your kids. Communicate your values and experiences with money. Encourage them to ask you questions, and be prepared to answer them – even the tough ones.
2. Explain the difference between needs and wants, the value in saving and budgeting and the consequences of not doing so.
3. Set up a chore chart and give your children an allowance for completing their tasks.  Require them to save at least a small portion each week.  The three jars method, one for spending, one for saving and one for charitable contributions is a good way to impart a sense of responsibility.
4. Open up a savings account at your local bank for your children and take them with you to make deposits, so children can learn how to be hands-on in their money management
5.

Be an example of a responsible money manager by paying bills on time, being a conscious spender and an active saver. Children tend to emulate their parents' personal finance habits.

Crown Financial Ministries has some additional advice on how to teach your kid's about money - including tithing and giving money - click here to read  more.

  

 


Today is "Teach Your Children to Save Day" ... Here are a few tips from American Bankers Association Education Foundation ...

Comments (12) -

4/27/2010 4:19:36 AM
J Bachmann United States
J Bachmann
I just heard about the "teach your kids to read" day, and I have to chime in.  I recently finished reading "Secrets of the Millionaire Mind" by T. Harv Eker, and in one of the final chapters he breaks down how you should allocate your money.  10% should go to a Financial Freedom (retirement) account, 10% to a Savings to Spend account (car, down payment on a house, etc.), 10% to giving, 10% to a play account that you are required to spend each month, and 50% to your necessities.  I just feel bad that I wasn't taught this when I was a kid, I had to learn it at 30!

Thanks,

J
4/27/2010 6:34:27 AM
Karen Carroll United States
Karen Carroll
I heard your discussion this morning about teaching your kids to save money.  Recently my husband and I finished the Financial Peace University Course by Dave Ramsey.  I must say that it was the best investment I've ever made in my life.  We liked the course so well we recently purchased the course that is available for kids.  I can honestly say that I wish I would have taken this course as a teenager so that I would be better prepared for my adult life.  I'm excited to start the program with my kids so that they don't end up in the same situation I have with my finances.  I think it is a must that our kids learn all about giving and saving.  
4/27/2010 7:21:49 AM
Cynthia Gindorf United States
Cynthia Gindorf
I have to tell you about how I've taught my daughter to save, but I can't take full credit because I read about the idea somewhere when she was little.  Starting in first grade, my daughter got an allowance every week, one dollar per grade, so of course, first grade - one dollar.  But here's the good part.  She was required to split her allowance into 4 parts:  spending money, college savings, "big toy" savings, and charity.  We got her 3 piggy banks and a little purse, and she put a quarter in each one that first year.  Her allowance went up with each new school year, and now in 8th grade, she gets two dollar bills a week, and 6 dollar coins.  A few years ago I started letting her choose how much went to each savings type, as long as something went to each, but she's pretty much stayed with splitting it all equally.  She now had nearly $800 in her college bank account, pulls out the charity money each Christmas and we go shopping for the local childrens shelter.  This last weekend we went to the video game store and she bought two new video games with the "big toy" money.  I believe she in more generous and responsible because of this system.  Tomorrow, she is buying donuts for a class party and won't even let me help.  Teaching your child to save WORKS, if you start young and just make it part of your life!
4/27/2010 7:21:58 AM
Shelby Sasfai United States
Shelby Sasfai
I was listening to you guys on the way to work.  If you added all of your pennies up after 30 days, you would have 1,073,741,823 pennies.  There is a children's book called One Grain of Rice, A Mathematical Folktale  that teaches this principal.  Author is Demi  Great Book!!!  Thanks!!
4/27/2010 7:40:55 AM
Patsi United States
Patsi
I was in the car when you told the analogy between the penny, and the thousand dollars(compound interest).  would you mind sending me the story, or posting it.

Thanks
4/27/2010 7:41:58 AM
Sandra Ramirez United States
Sandra Ramirez
I was intoduced to a company back in 2007, that does exactly what today's topic is all about. Primerica Financial Services is a company that teaches adults as well as young people how to manage their finances Free of charge! They teach people to save money and invest the difference. All for a brighter tomorrow. Financial Education is the key. And when a qualified professional is willing to sit down with you to teach you on a one on one basis its to be jumped on. The company has been around since 1977. Did I mention it's a free service.
4/27/2010 7:46:50 AM
Don United States
Don
Thank you so much for talking about teaching kids about money - and you had Joe Sangl on the show! So exciting. I went through the I Was Broke Now I'm Not class and group study and it CHANGED MY FAMILY'S FUTURE FOREVER!
4/27/2010 8:17:41 AM
Crystal Spencer United States
Crystal Spencer
Just heard Lisa talk about her beloved pillow.  I can TOTALLY relate.  I am 31 years old and until about a year ago I had a blankie, just like the Charlie Brown character.  I couldn't to to sleep without it.  Problem was, it wasn't much of a blankie any more.  It was literally in pieces that I had tied together and made a little knotted rag.  I had it since I was a child and left it in California once (we live in Texas) and had to have it mailed to me.  My relationship ended SADLY with my blankie about a year ago when my sweet little doggie ATE IT.  She sure did, she tore up what almost didn't exist in the first place.  It was so hard but I have learned to live with out.  Life is hard with out the blankie!!!!
4/27/2010 8:53:09 AM
Jan United States
Jan
I wish I'd of heard this when I was a younger now I'm an adult trying to dig my way out of this. Sometimes its so hard I don't know how to keep going. Thanks Jan
4/27/2010 10:29:44 AM
Rachel United States
Rachel
I'm now a teenager who is in college but I remember my parents taught me about money at a young age. We had a envelope system, I also did chores and could do various jobs around the house. I remember making envelopes titled vacation, goal, church. I'd put 10% in the church, and then I'd put about 50% in the vacation that way when we went on vacation, I'd spend the money that I'd save in the vacation envelope. I still use that system today, it lets me know when the money is all gone it is.
4/27/2010 1:26:45 PM
Jenny United States
Jenny
Can you post the example you used today on air about compounding interest?  The contest with either $1,000 dollars an hour for 30 days vs... the compounding penny? I want to use it for our table topic for dinner tonight.  I loved it!   Can't find the exact wording of the "contest".  Thanks! Jenny
4/28/2010 2:36:10 AM
Life United States
Life
Thanks Klove about how to save money because in real life it's not easy, if you teach kids they will do fine and they will save more. Something new for me
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