Teach Your Kids to Set Savings Goals
How to Teach Your Kids to Set Savings Goals
Teaching your kids to be financially responsible can be a very rewarding experience. An easy place to start is by helping your kids create a savings plan and set small, easily achievable savings goals. Laying a strong financial foundation early on will help set your child up for a successful financial future. Here are some techniques to help establish and achieve their savings goals.
Encourage a Savings Goal
If your child wants the latest gaming system or a pair of popular basketball shoes, this may be a great opportunity to teach your kids about setting a savings goal. A fun way to keep them motivated and stay on track is to create a visual savings tracker. You can make your own or find a free savings tracker coloring page online for your kids to stay accountable. This will help your child measure their progress and see how much they are saving for their prized possession! Have your child color in each weekly savings milestone to track their progress. Start with small increments of $1 or $5, which gets colored in as they progress. Once they reach their savings goals, the entire grid is filled with color. This activity will help them track their efforts and stay accountable. Let family and friends know about your child’s savings goal so they’ll be more likely to give cash for special occasions like birthdays, which means more trips to the credit union and an increase in savings.
Determine How They Will Earn Funds
Discuss ideas with your kids on how they would like to earn extra money, which will help them pay for things they want. If they have a weekly allowance, encourage them to do extra chores to earn money to add to their savings. This can be fun and creative. Examples can include house chores, yard work, caring for pets or helping neighbors. Consider the money they’ve already saved as you figure out how much they will need to earn to reach their goal. You can also calculate money that will be added from a birthday or holiday. Once the extra money has been calculated, figure out how much money they can save each week or month and how long it will take to reach their goal. Provide an example for them to illustrate how long it will take to accomplish a savings goal by dividing the weeks into the amount needed (i.e. a gaming system that costs $720/12 weeks = $60 a week). If the item costs more than expected, offer to match the amount your child is saving once they are halfway there.
Create a Savings Account and Savings Goals
A savings account is a great way to help your kids learn how to be fiscally responsible and is a great opportunity for you to start an ongoing conversation with them about money. It may seem like something you want to put off until kids are older, but there are many benefits to doing it early. According to a recent article on PBS.com, money habits are set by age 7, so it’s important to teach your child the value of a dollar now. Kick-start your child’s financial education by opening a savings account with SDCCU! This is a great opportunity for your kids to have hands on experience with banking and online banking is a great visual way of seeing their money growing.
Help your teenager learn valuable money management skills by opening their own teen checking account through our Teen First program. SDCCU’s teen checking account is a great option for Southern California teens between the ages of 13 and 17, who are looking to start managing their money responsibly. Help your teen save for things they really want like concert tickets, a new surfboard, college or that car they have been dreaming of with a Teen First Checking Account. They can earn interest on balances over $100 in the form of dividends to help reach their goals faster.
Celebrate Reaching Savings Goals
Once your child has reached their savings goal, take them to purchase what they’ve been saving for. Give them positive feedback and encouragement about their savings journey. Share your values and experiences with money, and encourage them to ask you questions. Challenge your kids to set a new savings goal as often as possible.
SDCCU makes it easy to teach your kids about money and business through the SDCCU Biz Kid$ program. SDCCU launched the Biz Kid$ program in partnership with the San Diego County Office of Education and the County of San Diego in support of Live Well San Diego in 2015. Created by the producers of Bill Nye the Science Guy, Biz Kid$ is an award-winning, comprehensive financial literacy program focused on teaching students how to use credit wisely and about the importance of saving, budgeting, investing and giving back to their communities. The Biz Kid$ program and all episodes are based on national standards for financial literacy and entrepreneurship education, and have been mapped to meet individual state standards. For more information, visit SDCCU Biz Kid$ programs. It’s a fun and interactive way for your kids to learn more about finances.
By making it a priority to teach your kids about the importance of setting savings goals early, you can help them build the financial knowledge they will need to make smart financial decisions throughout their life and into adulthood. SDCCU is committed to helping the community, especially our youth, increase their knowledge about money.
Visit our Financial Knowledge Blog to learn more tips on setting up a solid financial future or join us for Financial Wellness Wednesdays.