Forcing vs. Inspiring Kids
to Save
Forcing Kids to Save
Many parents force kids to save: 10%, 30% or even half
of their allowance, earnings and gift money. And it works
- at least until they hit their rebellious teens, when
they’re bound to insist, “It’s my money, I can do what
I want with it!” And they’re right!
The other problem with forcing
them to save is that some kids, when they leave home,
will likely sigh with relief and think, “Thank goodness
I don’t have to save anymore!”
The goal is to get them to
want to save. Forcing them may successfully get
them to save while they’re under their roof, but it won’t
necessarily compel them to do so once they’re out on their
own. And that’s just when saving becomes most important!
Inspiring Them to Save
You can guide your kids to develop lifelong saving habits
by helping them to set goals that are meaningful to them.
Use your kids’ natural interests.
If your daughter loves skiing or playing guitar, for instance,
and she falls in love with a $200 pair of skiis or new
guitar, use that as an opportunity to make that a saving
goal.
Say she gets $15 a week allowance,
$5 of which you’ve earmarked as discretionary money. Help
her identify different strategies:
Save all of it: (foregoing
CDs, movies and pizza with friends): It’ll take about
10 months to save up for the item. That’s beyond
most kids’ (and adults’) tolerance for delayed gratification.
Consider this a benchmark against which to rate other
strategies.
Get a job: If your
daughter began babysitting or got herself a paper route,
earning $20 a week, she could save up $200 in 10 weeks.
Save and work: Add
$5 of weekly discretionary allowance to the $20 earnings,
and she can save up $200 in eight weeks.
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For young children:
Set more modest goals - things they can save for in
much shorter time periods. Offer to let them do extra
chores (on top of their usual household chores for which
they’re not paid) to help them earn and save a bit faster.
Tape a picture of what they’re saving for onto their
bank, and chart their progress visually, perhaps with
a picture of a thermometer you color in.
Next month we’ll discuss
using incentives to motivate your kids to save.
Available Slides:
Financial Values Puzzle
Allowance
Responsibilities Based Allowance
Misconceptions About Saving
Forcing vs. Inspiring Kids to Save
Giving Kids Incentives to Save
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