Saving money is an important skill to learn at a young age. When it comes to teaching kids how to save their allowances, getting them excited about the concept can be a challenge since kids are naturally drawn to the idea of immediate gratification.
Fortunately, there are creative ways that parents can make saving fun and exciting for kids. This article will share thoughts on how to make saving allowances an enjoyable experience for children of all ages.
Focus on Smaller Milestones
Making saving allowances fun for kids is not an easy task, but it can be done. Parents can use smaller goals and milestones to make saving money enjoyable for their children. Setting a goal that the child can reach soon will give them a sense of accomplishment and encourage them to keep saving.
For example, when setting out to save up a large amount of money like enough for a new bike or video game console, break down the total cost into smaller chunks that are more manageable. Celebrate each milestone as they are achieved - whether it's a trip to the movies or dinner out at their favorite restaurant - this will keep them motivated while teaching them financial management skills.
After achieving this goal, parents could then set larger goals with increasing amounts of money that have bigger rewards when met such as funding part of a family vacation or buying something special like new shoes or a bike.
Design a Fun Short-Term Goal
Mikki McDougall, Real Estate Broker, says designing a goal-oriented approach to saving allowances is an essential way to teach children the value of money. “Create a goal that your kids are motivated and excited about is a great way to get them into saving their allowance”, says Mikki.
Start by talking to your children about what goals they may have in mind. Maybe they want to buy a new video game or toy, or save up for a family vacation. Once you’ve identified their goal, make sure it is realistic and attainable with the amount of money they will earn from allowances. It’s important for the goal to be achievable so that kids don’t become discouraged if they aren’t able to reach it right away.
From there, create incentives like small rewards like treats or extra activities when they hit milestones along the way in order to keep them engaged and motivated while reaching their final goals. Kids can also be encouraged to save up for a family day out or special treat they wouldn’t usually have access to, like tickets to the zoo or an exciting meal at a restaurant.
Track Progress Visually
For kids, saving money can be a drag. They often don't understand the concept of saving and even if they do, it's not always that exciting as they are not able to immediately see the fruits of their labor. Visual tracking tools are a great way to help them see what they have saved while also providing a reward system when they reach certain milestones.
When deciding on a visual tracking tool, it is important that the tool be age appropriate and easy enough for children to use. Choose one that allows them to see how much money they have saved over time as well as any potential rewards or bonuses based on reaching certain goals or milestones. You can also create incentives such as an extra allowance if they reach their goal by a certain date or even matching the amount of money they save up to a set limit.
For example, using a chart to track progress is a great way for parents to show their children how close they are getting to their financial goals. Kids love being able to visibly see their progress, and when coupled with rewards, it can be an effective tool for teaching children about personal finance. You could even set up a jar where they can see their progress so that they can see that every time they add coins or bills, it adds up!