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Essential Savings Tips for Kids & Young Adults

Mother And Son Braking Their Piggybank

Teaching kids and young adults the importance of saving money is vital to building their financial literacy and independence. By introducing practical and engaging methods, you can help young savers develop strong financial habits that will benefit them throughout their lives. This blog provides essential savings tips for starting your child's financial journey.

Use real money instead of fake currency. Using paper or coin currency can make saving money more tangible. For instance, if your child receives a $10 allowance, give it to them in cash and provide a savings account or piggy bank where they can track how much money they have saved. Encourage them to develop the habit of saving a portion of their allowance before spending it. A savings account can help by making it more difficult for them to access the money than simply having it in their wallet.

Wait at least a week before making a major purchase. Impulse buying involves a mental struggle between pushing towards and pulling away from a purchase. Teaching children to wait at least a week before making significant purchases is essential. This waiting period allows them to reflect on whether the item is necessary or just an impulse buy. It helps them understand the difference between wants and needs and encourages more thoughtful spending habits.

Teach your children how to budget. Start by creating a simple budget that includes their sources of income (allowance, part-time job earnings) and expenses (savings, spending). If they decide to allocate 50% of all the money they receive to savings, then they can spend the remaining 50%. This will help them understand how to allocate money and prioritize spending wisely.

Gamify the savings process to make it fun and engaging. Create challenges or savings games where your child can earn rewards for meeting certain savings milestones. This can include matching contributions, offering small prizes, or creating a point system for good savings behaviors.

If you’re not sure how to start your child’s savings, contact an UNCLE representative to get started. Giving your child a head start on financial responsibility is easy with UNCLE’s Youth Savings Accounts, specifically designed to help children and young adults have a safe place to keep their money.

 

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