Every penny counts when you teach them to count every penny.Teaching your children the value of saving.
That old adage is true: A penny saved is a penny earned. Familiar colloquials aside, saving pennies and dimes as a child can be the cornerstone of strong financial habits as an adult. While saving money may be a crucial life skill, it’s not one that comes easy for everyone. It’s important to teach them at an early age the value of setting—and meeting—financial goals. These lessons are the cornerstone of developing a strong financial literacy, and beginning this journey can be as easy as teaching your child to drop their pennies in a jar.
Before they can start saving, they must understand spending.
Your kids’ earliest introduction to money will most likely come from watching you spend it. They see you paying for goods and services, often for them, and begin processing the basic idea of transactions. They see the effect of spending, but without always understanding where that money came from, or why the purchase makes sense. This is when the conversation should begin. Explaining the concepts of savings, budgets and goals at an early age can begin instilling the foundations of financial responsibility that can be built upon as they grow and develop.
But understanding transactions isn’t enough.
Teach them the difference between wants and needs.
Once your child begins to understand the concept of money and spending, the next step in teaching the value of saving is to help them understand the difference between wants and needs. Explain that needs are basic necessities we need to live, such as food, shelter, and clothing. They aren’t always fun, and sometimes they keep us from buying things we want, like candy from the checkout lane, or a new videogame. This not only allows you to explain the idea of prioritization but begins illustrating the basic concept of needing to save for those things that can’t be bought immediately. This helps them understand and develop goals.
And speaking of goals…
Help them set goals and make a plan.
Sometimes, the best way to learn is simply by doing. Taking a somewhat abstract concept and putting it into practice in the real world can help children see the rewards of setting and obtaining goals. Once they have something to work towards, you can help them plan how they can accomplish it by breaking down how long it will take to save enough through allowance, chores, birthday gifts, and even finding change in the cushions.
Of course, once they have their goals set and their plan in place, they still need one very important thing:
Give them somewhere to put it.
Once your child has their eyes on the prize, and is ready to start putting their plan into practice, they’ll need somewhere to put it. Anything from an old mason jar to a cute, store-bought piggy bank will work, so long as they have somewhere to store their money beyond their pockets. This will allow them to see it begin accumulating in real time, and as their piggy bank fills up, they’ll understand how they are moving closer to their ultimate goal.
Now comes the fun part.
From the piggy bank to your bank.
When the piggy bank is full, your child can finally see his hard work begin to pay off—literally. Take them to your local Coinstar kiosk, and let them see just how much they’ve saved. If your bank or credit union has a Coinstar Anthony kiosk, they can even open a real savings account and have their coins deposited directly from the kiosk into their account, and take their newfound practice of saving to the next level.
Instilling the tenets of good financial literacy into a child at a young age gives them more than just a broader understanding of commerce; it gives them an advantage. Teaching the importance of saving gives them a head start for all of life’s future endeavors and helps set them up for success as they grow into adulthood.
Does your bank or credit union have Coinstar? Learn about all of the great features our branch kiosks have to offer beyond the art of counting coin, and put your kids on the path to financial literacy.