Are Your Kids Big Spenders? Here’s How You Can Teach Them the Value of Saving
“Money doesn’t grow on trees.”
While unfortunate to note, this financial nugget of wisdom has been passed from one generation to another. It also sums up the financial literacy many people received as children. One survey indicated that only one in four adults admitted they were taught important money lessons as a child.
Learning the fundamentals of money and saving at a young age is crucial to developing strong financial education. A shortfall in financial literacy can have real-world repercussions.
Fortunately, with revolutionary apps like BusyKid, teaching your kids financial literacy and the value of saving has never been easier! Just download the BusyKid Chores & Allowance app in the Apple App Store or Google Play, and you are one step closer to teaching your kids about responsibility, financial literacy, and the value of saving money.
During set up, The BusyKid app allows parents to allocate a percentage of allowance each week into three “buckets”: Spend, Save, and Share. For example, if your child completes their weekly chores for a total of $10, and you had set 60% of their allowance to Spend, 30% to Save, and 10% to Share, your child would receive $6 to spend, $3 to Save or Invest, and $1 to Share via donation to charities. ALL available in one easy-to-use app!
You can also take the financial literacy lessons to the next level with BusyKid’s debit card for kids. With the BusyKid Spend Card, you can effortlessly teach them about proper money management, saving, and the power of compounding interest while keeping the entire process convenient and secure.
Teaching Your Kids the Value of Saving
Saving money is one habit that will require time to build and master. Consider this: According to statistics, 28 percent of American adults (3 in 10 individuals) have no savings to cover emergency expenses. With that in mind, here are a few practical tips that can help get your kids on the saving bandwagon:
Differentiate wants versus needs
Helping your kids distinguish their wants against their needs is one of the first things you need to do when teaching them the value of saving. To make things easy for them to understand, you can classify all the basics like food, shelter, and clothing as needs. Everything else is considered wants.
Help them set saving goals
If you tell your kids to save money without telling them why, they might consider the process pointless. Help them appreciate the value of saving by helping them define saving goals. Knowing what they are saving for can be the motivation they need to get started.
To ensure they don’t get overwhelmed, break their saving goals into manageable bits. For instance, if they want to purchase a video game worth $20 and you give them a $10 allowance each week, help them figure out how much they need to set aside to purchase the item in a month.
Give them a place to save
Once they have identified a savings goal, your kids will need a place to save. The BusyKid app acts as a savings account for kids, amongst many other beneficial features, and can be accessed from any mobile device. For younger kids, a child simply logs in using a household or parents device using their unique PIN # to access their dashboard and track progress.
Help them track their spending
Part of being a good saver is knowing where your money is going. If your kids are already getting an allowance, help them determine where their money is going by teaching them to list down their purchases each day and adding them all up at the end of each week.
Seeing where their money is going can be an eye-opening experience for them. From there, they can clearly see their spending patterns and what they need to change to reach their savings goals.
Give them savings incentives
If you find it hard to motivate your kids to save, consider giving them a savings incentive. For instance, if the savings goal is $250, offer to match a percentage of the amount they have saved.
Another option would be to offer a monetary reward when they reach a savings milestone. For example, offer a $50 bonus when they reach half of their target and another $50 once they reach their target.
Over To You
When it comes to saving and financial literacy, teaching your kids early can go a long way. It is also crucial that you make room for mistakes as it is all part of the process. Lastly, ensure you are there to guide them every step of the way. This is important so you can help them start life on a sound financial footing.
*The BusyKid Visa® Prepaid Spend Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a licensee from Visa® USA Inc. All cardholder’s funds are insured by the FDIC in accordance with the FDIC’s applicable terms and conditions. For more information about the card’s terms and conditions including the Visa® Zero Liability policy, click here. One BusyKid Visa® Prepaid Spend Card is included with a paid family subscription, but additional cards cost $7.99/yr with a linked bank as a funding source. A small $.55 transaction fee will be added to orders using a credit card. There may be some additional fees associated with the Spend Card, please see our FAQ’s for more information.