Along with a plethora of boxes to unwrap on Christmas morning, many kids will receive money from loved ones as gifts as well. Since it’s likely your child will be opening at least one Christmas card with cash, now is a good time to help teach your children fiscal responsibility.
According to the American Institute of Certified Public Accountants, 45% of kids spend their money on outings with friends, 37% spend it on digital devices or downloads and 33% spend it on toys. Your kids might see an influx of cash during the holidays, but you can also help them save their money throughout the year, whether they are earning an allowance or mowing lawns or walking dogs.
Here are a few tips to help your kids save their holiday or allowance money, according to WindgateWealth.com:
- Start with a piggy bank: Tell your kids the goal is to fill up the piggy bank with dollars and coins until there is no room. Explain the piggy bank is for saving money for the future and their money will grow over time.
- Open up a bank account: When the piggy bank is full, take your child to open up a savings account. Have them count their money to be deposited so they can see how much money they have saved.
- Use savings jars: For something they really want, explain that they will have to save up for it. Use a jar for each of their desired purchases, then offer them small denominations to encourage savings.
- Create a timeline: Use a visual timeline so that your child can visualize when they will reach their savings goals.
- Lead by example: Use a jar of your own that you put funds in regularly to set a good example for your child.