How to Use a Savings Account to Teach Your Kids Money Management Lessons

Good money habits go a long way. Reports find that finances are still the leading cause of stress both in relationships and for individuals. Fortunately, making intentional decisions to save more and spend less can get easier over time especially if those habits are learned early on. If you’ve got youngsters in your house, then now is an especially valuable time for Teaching Teens About Money.

Consistency is key

Sure, setting money aside is (relatively) easy when you get a sudden influx of cash – like a birthday check. But to make saving money a part of your child’s future financial routine, you need to make sure they understand that saving money is something that happens every week or month.

A little bit goes a long way

If you’re consistent about saving money, then it doesn’t require a large deposit to get ahead. Walk through a couple sample scenarios with your child to illustrate how powerful even a small amount of money can be over a consistent amount of time.

Out of sight, out of mind

If saving money were easier, then over 60% of us probably wouldn’t be stressed about it. Let your kids know that saving money is hard, and it’s even harder if you have easy access to it, like keeping it in a piggy bank in your room. Readily accessible funds are tempting to spend, which is why it’s important for kids to keep the money they’re saving in the bank. Safety first

Opening a first savings account is also a chance to talk about the importance of being safe with money. Talk to your kids about why stuffing money under a mattress or keeping it in a piggy bank may not be the safest option. Work hard now to enjoy more later

Speaking with your kids about a savings account is a great opportunity to work in messaging about delayed gratification. Let them know that some of the best things in life – rewarding jobs, relationships, being able to afford a vacation – often require a lot of hard work.

Importance of giving back

After your child’s developed a sizeable amount of money in their account, then you may want to consider asking them if they’d like to donate some of it towards their favorite charity or cause. While the actual amount of money that’s given may be small, the habit of choosing an issue impacting their community and making an effort towards solving that is hugely important.