How soon should a child start thinking about money and savings? Is now—today—too soon? Probably not. As kids move into elementary school and begin learning about counting, money, and helping out with household chores, parents have a great opportunity to start a conversation about saving and spending.
Let’s face it, with all the financial stresses being experienced by families today in the midst of the current economic downturn, it’s become obvious that saving is something we all need to do, including children and teens. How does the conversation start?
First of all, kids of any age need to have some money around that they can save. Initial savings should start through giving your child an allowance, in exchange for helping out around the house. Families will differ on how much to give for what, but it’s important that kids have some money to call their own.
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If your child is good about helping out at home, one idea is to offer “bonuses” for extra chores, on top of a basic allowance. Parents should encourage their child to start putting some of that extra money away in a “rainy day” fund that they can save.
Teen who start taking on jobs outside the home should have a savings account established at a bank, so they can put their earnings away safely and learn to keep track of what they earn.
Sure, early savings deposited in a piggy bank at home may not seem like much, but with time, earnings—and savings—can grow. It can all add up to a great learning experience for children and a lucrative one as well.