Give a child a buck or two when you go out, and say plainly that whatever is left is theirs to keep. That small rule is one of six ideas in a Stash guide on teaching kids to save, and it is the easiest to start.
The guide’s premise is blunt. We teach children to read, to write, to be polite at the table. Money, it argues, gets left out, even though habits learned young tend to last a lifetime.
Give savings a place to live
Part of the job is simply giving coins somewhere to go. A homemade object with a coin slot works, and it need not be fancy. Stash suggests a “kitty” bank or a “puppy” bank to get a young child interested in stashing money away.
Make them wait
When a child is set on a gadget or toy, require a reasonable waiting period. The cooling-off reduces impulse buying. If the child cannot remember wanting the thing a day or two later, the guide says, that is the lesson: it was not worth buying.
Set a goal and reward it
Base the goal on the child’s allowance and any chore income, and track progress weekly. Stash offers bonus money for a job well done. A child who gets $10 a week, for example, might earn an extra $5 each time she manages to put away $100.
Interest is a harder sell. Young children struggle with the idea, but older kids tend to appreciate free money from the bank, so make it easy to follow and show them what happens when savings grow.
Match what they save
If a child wants a guitar or skateboard, offer to cover half by matching what she has saved. Stash calls it a sneaky tactic, and a useful one if the child later has a 401(k) with an employer match. It cites a 2015 study showing that a quarter of employees skip the employer match, leaving over $1,300 on the table each year.
Show them yourself
Children watch how adults spend. Stash tells parents to think about the message their own habits send, and to show respect for the money they earn, whatever their situation.
