Thursday, September 20, 2012

So Much More

I have known, from an early age,that you should always have some money set aside for a "rainy day." As a child, I wondered how money would help keep me dry but I did get the basic point that saving was good and not saving was risky.

The lessons learned by saving are far more extensive than simply being prepared for a rainy day. Saving also teaches the power of cumulative actions. It teaches how to break a project down into smaller pieces. It teaches delayed gratification. So how do you teach kids to save?  When is the right time to teach them? What's the best method for teaching them? Start with the child. Is this child a planner and a plodder or is this a child who flies by the seat of her pants? Planners and plodders will understand saving as easily as breathing. Your task with these children will be to teach them to let loose with their money from time to time. That is not the case with the seat-of-the-pants crowd! These children will need every lesson you can devise, and may still need some incentives before they really master the challenge of setting aside for the future.

Here are a few strategies I've tried or read about over the years:

First, teach saving as a habit. Explain that this is how we handle money, period. If they get a $1 allowance, pay it in dimes, and give them envelopes, jars, banks, wallets, whatever it takes to make them separate those dimes into the saving, giving, and spending categories. Help them count it and keep a chart of how it is growing so they can see how small amounts accumulate into larger amounts.

Say no to something they want that you are willing for them to have. Make a deal to pay half the cost of the item if they save half. Ideally the wait in weeks should about match their age: 8 years old = 8 weeks of saving. (This also assumes that they have an allowance, or chores you will pay for so that they have access to some cash each week.) If they are older, and want more expensive things, help them figure out how long it will take, and perhaps provide incentives along the way.

Model the discipline of saving. Save up for a big purchase and get the whole family involved in watching the money accumulate. The price of a new refrigerator or washing machine will be big enough to seem unattainable to the average kid. Make a chart or put up a thermometer; find some way to show your kids that you are moving toward the goal. This is a real opportunity to teach your kids an impressive lesson about what can be done when you save your money.

In the midst of all this, don't lose sight of the fact that the best habits and choices don't always guarantee smooth sailing. Remind yourself, and the kids, that God is steadfast and always at your side - able to solve problems that money cannot touch. Faith has carried far more people through a crisis than savings, but savings will nearly always make the problems simpler. 

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