Teach Kids to Set Savings Goals
Your child wants a new longboard ($200) or the latest basketball shoes ($120), but it’s just not in the budget this month — or for the next three months. Rather than a flat-out “no,” work with your child to set savings goals and then help them reach them. Here’s how:
Identify the goal
If your child has an item they’d like to purchase, the goal amount would be the purchase price. If the item is exceptionally pricey, offer to match their savings once they get halfway there. Setting a reasonable goal amount will help them see when the end is in sight and provide more motivation to reach the goal.
Make a plan
What will they do to reach the goal? Sit down with your child and discuss ways to earn the money. Do they have a part-time job? Babysit? Are there additional chores they can do around the house to earn more money? Get creative! Together, figure out how much money they can save each week or month and how long it will take to reach their goal.
Set money aside
Make sure your child has a savings account or another method for savings. Spending can often be quite tempting if the cash is easily accessible. If your child is serious about saving, make sure they have a place to put the money away.
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Once your child has reached their savings goal, follow through and allow them to purchase what they saved for. And if you agreed to match their savings, make sure you’re ready to do so, too.
Giving your children the knowledge and help to reach a savings goal is a life lesson that they will carry with them throughout their adult lives. You might even be surprised. Once your child has reached their savings goal, they may decide that the item they originally wanted to purchase isn’t worth the work they put into it and use those savings even more wisely.