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From Piggy Banks to Paychecks: Teaching Kids to Save at Every Age

Saving money is a fundamental skill that can set children up for a lifetime of financial stability and success. From the moment they understand the concept of money, parents can begin instilling the value of saving. But teaching kids to save isn’t a one-size-fits-all approach – it evolves with age and understanding. Let’s explore some age-appropriate strategies for cultivating the saving habit in children at every stage of their development.

Early Years (Ages 3-6)

In the early years, children are just beginning to grasp the basics of money. Coins and bills start to become fascinating tools for learning. Here’s how parents can start teaching saving habits to kids 3-6 years-old:

1. Use visual aids. Introduce piggy banks or clear jars so children can physically see their money grow. Let them decorate their own piggy bank to create a sense of ownership.
2. Set savings goals. Help children identify short-term goals, such as saving for a toy or a treat. Encourage them to contribute a portion of their allowance or gift money towards these goals.
3. Lead by example. Children learn by observing. Model good saving habits by discussing your own savings goals and actions, such as saving up for a family vacation or a new household item.

Middle Childhood (Ages 7-12)

As children enter middle childhood, their understanding of money becomes more sophisticated. They start to comprehend the value of saving for larger purchases. Here’s how to build on their foundation:

1. Introduce allowances. Give children a regular allowance tied to completing household chores or responsibilities. Encourage them to allocate a portion to spending, saving, and sharing (charity).
2. Open a bank account. Take children to the bank to open a savings account in their name. Teach them about interest and how their money can grow over time. A Youth Savings Account from First State Bank Nebraska offers no monthly service charge or minimum balance along with a $5 bonus when the account is opened with an initial deposit of $95 or more. Learn more or open your account online here.
3. Encourage delayed gratification. Help children distinguish between needs and wants. Encourage them to save for bigger items rather than spending impulsively on immediate wants.

Adolescence (Ages 13-16)

During adolescence, teenagers start to earn their own money through part-time jobs or allowances. They also face more complex financial decisions. Here’s a few tips to guide them through this state:

1. Teach budgeting. Help teens create a budget that includes saving for short-term goals (like a car or college expenses) and long-term goals (like retirement).
2. Discuss financial responsibility. Talk openly about financial topics such as credit cards, loans, paychecks, and interest rates. Emphasize the importance of living within one’s means and avoiding debt.
3. Encourage entrepreneurship. Support your teen in exploring entrepreneurial ventures such as mowing lawns, babysitting or dog sitting. This can teach valuable lessons about earning, saving and managing money along with organizational and communication skills.

Teaching kids to save at every age lays the groundwork for financial independence and success later in life. By starting early and adjusting strategies as children grow, parents can instill healthy saving habits that will serve them well into adulthood. Remember, the lessons learned about saving today can shape their financial future tomorrow.