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Elder Law and Estate Planning Blog - Lancaster, PA

Wednesday, July 24, 2013

Teaching Kids to Save

As an adult, you know that saving money is important.  Whether you are saving to pay for college for your children, saving for the next vacation, or simply saving in case you need the money in the future, you have learned the value of a dollar.
However, a staff members recent trip to Spain made me think about children and how they view money.  She came back from Spain saying that after a month, the euro still seemed a bit like monopoly money since it has a different value than the US dollar.  Although she understood that she was spending her money, she didn’t see the value in dollars and never really knew how much things were costing her.  Our children are like that.  They don’t know how much that green dollar bill with a number 1 in the corner is really worth.  And with today’s age of apps and computers, buying things online is making it harder for them to realize the money’s value and that they are spending it.
So how can we teach our children these valuable lessons?  Well first, I’d recommend not letting them make in-app purchases or other digital purchases until they gain some mental and financial maturity.  Additionally, encourage your children to save their money for some easily attainable items.  If you are trying to explain saving to them in terms of saving for college, kids won’t grasp the idea (I wasn’t thinking about college at 6 years old).  But if they’re saving for a toy, they can watch the money add up until they reach their goal.  And then, when they’ve reached their goal, let them spend the money on their toy.  They will see that they’ve reached their goal, but they will also see an empty piggy bank, giving them incentive to start saving again.

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