It’s never too early to learn how to save money. As a parent, you have a lot of responsibilities—from teaching healthy habits to differentiating between right and wrong.
But financial responsibility is one of the most important things you can teach a child.
1. Earn money. Open a lemonade stand. Sell Girl Scout cookies. Raise money for a charity. When it comes to earning money, children have several options. And there’s no better way to learn financial discipline than by earning money to save it. You can also assign chores for a reward, which kills two birds with one stone: Your child learns how to complete a task and understands the concept of financial compensation.
2. Open a savings account. Even if your child only has $50 to spare, many banks offer accounts specifically designed for children ages 12 and under. Not only do they learn to be financially responsible, but they’re also exposed to all sorts of important financial terms—deposits, interest, compounding. Bank accounts bring a certain structure that instills a sense of professionalism in a child.
Earning money and opening a savings account go hand in hand. The former teaches your child the need for hard work, the value of competitive spirit, and the intricacies of salesmanship. The latter teaches your child that earning money isn’t enough in it of itself. With it comes the added pressure to be responsible, save for the long haul, and watch the money grow year after year.