Open a Savings Account

As a child, the bank fascinates you. People bring their money and store it in the bank, yet you don't see where it goes and you don't know how the banking system works. Give your child a taste of the unknown by helping them set up a savings account. Make it a special date that they can look forward to, like their eighth or tenth birthday, and make it a tradition for all of your children. Go to the bank together with whatever money your child can get together then match his or her fund to open the account. Show him or her how much money they can earn from interest. It may not be much in a traditional savings account, but ten dollars seems like a big number to a younger child. Get your child excited to make deposits into their savings account. Once you are done setting it up and have shown your child the secrets to banking, take them out to celebrate their new personal finance success.

Savings Goals

Once the savings account is in place, you can sit down with your child and figure out what they want to save for. Help them write down their savings goals. Do they want the newest game console, a trip to Disneyland, or a car eventually? Help them see the big picture of what their money could go toward. Recently a friend of mine got back from a trip to Disneyland fully financed by his ten-year-old son who learned how to save money at an early age. Your child can do things like that too. Help them see the big picture and get excited about their dreams. Help them see how saving can achieve some of those dreams. Sit down with them and do the math so they can see exactly how much they need to earn to achieve their goals, how long it will take them to earn it, and what they have to contribute on a monthly, weekly, or yearly basis to accomplish their savings goals.

Match-y, Match-y

If you really want to get your pre-teens excited about saving money, offer to match their contributions to the savings account dollar for dollar. Once they understand how quickly money can add up this way, you'll be amazed about how tenacious they can be about saving money. If you are offering the same deal to a younger teen, help them see that with your contributions to their savings, they could earn their dream car by the time they are sixteen (or eighteen, or whenever). This will help them get excited and get onboard a savings plan. Learning to save can be made fun if you have the vision you can pass on to your children. If you are excited about what they could do with their savings, they are more likely to get excited too.