Teach kids to set savings goals

Your child wants a new longboard or a new pair of basketball shoes, but it’s just not in the budget this month – or for the next three months. This is a great time to teach your kid about savings goals.

Here's how you can work with your child to set a savings goal and then help them reach it.

1. Identify a savings goal

If your kid has an item they’d like to purchase, the goal amount would be the purchase price. If the item is exceptionally pricey, offer to match the amount of your kid’s savings once they’re halfway there. Setting a reasonable goal amount will help them see when the end is in sight and provide more motivation to reach the savings goal.

2. Make a plan

What will your kid do to reach their goal? Sit down with them and discuss ways to earn the money. Does your child have a part-time job? Babysit? Are there additional chores they can do around the house to earn more money? Get creative. Together, figure out how much money they can save each week or month and how long it will take to reach the goal.

3. Set money aside

Make sure your child has a savings account or another method for savings. Spending can often be quite tempting if the cash is easily accessible. If your child is serious about saving, make sure they have a place to put the money away.

• Learn more about savings accounts for children and teens

4. Follow through

Once your child has reached a savings goal, follow through and allow them to purchase what they’ve been saving their money for. And if you agreed to match their savings, make sure you’re also ready to do so.

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