Teach Your Preteen How to Save Money
For preteens, saving money is like any other skill they will learn—practice makes perfect. To teach your child how to save money, encourage them to make it a habit. If you can get them to practice the fine art of saving, eventually they will do it on their own without reminders. Youth are consumers too, and learning the basics will help them become smart spenders. It will also help them form a foundation for building good credit later in life.
Use visual reminders to help them learn the importance of saving
Talk to your child about their priorities and help them decide what they want to save for. Cut out a picture of what he or she wants and hang it in a place where they will see it often. It’s easier to save money when you can visualize the reason for it; this is as true for children as it is for adults. Set up a savings jar in front of the picture to encourage your child to reach his or her goal.
Remind them to keep money in a safe place
Help your preteen choose a safe place to store their money (ex: a savings jar, wallet, or piggy bank). When he or she receives money, make sure they put it into the safe place. Once the money reaches $25 or more, accompany your son or daughter to your financial institution to open an account and make a deposit. Change can be run through a coin counter and often deposited without a usage fee for minors.
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Help them understand the difference between “need” and “want”
Help your child determine if they’re desired purchase is an item they need, or if it is something they want. Of course, there’s nothing wrong with buying something they want, but learning how to differentiate between a need and a want can help them make wiser choices about where they should spend their money. You can also help them learn how to find the best deal by researching information online or comparing items in a store.
Suggest that they borrow instead of buy
This is a good time to teach the benefits of borrowing rather than buying. When you borrow a book, CD, or DVD from your local library, you practice thrift and as a result save money and natural resources. Money saved by not buying a new book can go into a savings account for future purchases.
Give them an allowance
An allowance will enable your child to learn how to make their own financial decisions. If your child runs out of money because they made a poor decision or failed to plan, don’t give them more. Let your child learn from the consequence of not having money to spend.
Help your teen sign up for online or mobile banking
If your children are in their teens, encourage them to sign up for online banking or download their financial institution’s mobile app if they have a smart phone. It can be fun to see money grow online and can help your child track their transactions. Also, if you are on the account, you will be able to monitor your child’s account activity in your own online banking portal. Helping your child become more aware of spending can aid in understanding how to manage money.
Your teen will be building credit soon. Do you know how to help them succeed?
Check out our credit score webinar to learn the basics.