Teach Kids to Set Savings Goals
Jan 26, 2015
Your child wants a new snowboard or the latest basketball shoes but it’s just not in the budget this month-or for the next three months. Rather than a flat-out “No” work with your child to set a savings goal and then help him/her reach it. Here’s how:
Identify the goal. If your child has an item he'd/she’d like to purchase, the goal amount would be the purchase price. If the item is exceptionally pricey, offer to match his/her savings once he/she gets halfway there. Setting a reasonable goal amount will help him/her see when the end is in sight and provide more motivation to reach the goal.
Make a plan. What will he/she do to reach the goal? Sit down with your child and discuss ways to earn the money. Does he/she have a part-time job? Babysit? Are there additional chores he/she can do around the house to earn more money? Get creative! Together, figure out how much money he/she can save each week or month and how long it will take to reach his/her goal.
Set money aside. Make sure your child has a savings account or another method for savings. Spending can often be quite tempting if the cash is easily accessible. If your child is serious about saving, make sure he/she has a place to put the money away.
Follow through. Once your child has reached his/her savings goal, follow through and allow him/her to purchase what he/she saved for. And if you agreed to match his/her savings, make sure you’re ready to do so, too.
Giving your child the knowledge and help to reach a savings goal is a life lesson that they will carry with them throughout their adult lives. You might even be surprised. Once your child has reached his/her savings goal, he/she may decide that the items he/she originally wanted to purchase isn’t worth the work he/she put into it and use those savings even more wisely.