It is important to teach your children to save money. This step can be easy to do, especially if you start at an early age. Saving money will teach your children discipline. It will also help them to see that as they save their money they will have more power to do the things that they want to do. Here are five tips for teaching teens to save money.
1) Have your teenagers save towards a goal. It may be a car. It may be a high school trip. If you discuss the goal with your child, and make a compromise for example if she saves half of the money, then you will pay the other half. This teaches your teenager responsibility without putting too heavy of a burden on them. If you are doing this with a car, you may want to set a maximum amount that you will pay out.
2) It is important to teach your children to save for long-term goals or needs as well. You may advise your child to put aside ten percent of his income for college. By teaching your child to put away money for the future you are teaching him that he can plan in advance. He will have a safer and more secure future if he continues with this habit.
3) You may want to set up a matching program for your child’s savings account, especially money that will be used for college. You may want to set a limit on how much you can afford to put aside each month. Then you will match dollar for dollar up to that amount each month. This works similarly to the employer contributions to a 401K plan.
4) You may want to teach your child about different ways to invest the money that they have saved. You can discuss IRAs for retirement. You should talk about mutual fund accounts, and the stock market. You can share your portfolio with your children, and teach them about why you made the decisions you did.
5) You should teach by example as well. You should share why you save money, and how you began to save money. You should also share how saving money has benefited you over time. If your children know you save money, they will be more likely to save money.
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