1) Start by talking about the benefits of saving money:
A child may see the wisdom in choosing to save if you discuss some of the good things that they might be able to buy for themselves if they avoid constant spending. Make it clear that regularly spending little amounts of money allows the child to get plenty of small items, but that purchasing big items requires patience and consistent saving.
2) Encourage them to set a limit on their monthly spending:
You can try talking about the fact that you limit your own monthly spending in order to help a child understand how they might want to approach this. Working together, you can figure out how to balance the things that the child regularly likes to buy against the things that the child is trying to save up money in order to buy.
3) Help them come up with ways to earn money:
You can encourage a child to save money by helping them to work out effective ways to earn cash from their grandparents and from helping neighbours. In addition, you can explain precisely when they can expect to get money from you (for example, you might want to offer some cash in exchange for chores or when you want to reward them for good behaviour).
4) Supply them with a fun way to store money:
To encourage a child to save money, you might want to give them a creative or fun place to keep their cash. For example, a wallet with one of their favourite characters on the front might be a good choice, or a large, clear jar that allows them to save up lots of loose change. Regarding the latter option, you can make an event out of their achievements by counting the money together on a regular basis. This event will also help your child to figure out how much money they still need to save in order to get certain things they want to buy.
5) Motivate them to keep saving:
In order to get a child into the habit of saving, you might try giving them an incentive. Perhaps you can offer to match their savings, offering to give 50% of whatever they have managed to save each month. In addition, you might encourage a child to display a picture of the thing they are saving to buy (so as to help them focus on their goal).
6) Discuss hiding the money:
If a child finds it extremely difficult to avoid spending too much money too quickly, encouraging them to hide their own money may help them to save it. They can put it somewhere it does not constantly catch their eye, discouraging impulse purchases.
7) Consider a savings account:
Once a child is old enough, a savings account can be a good way to make them more enthusiastic about saving money. You can explore the options offered by different banks, as some banks offer programmes for children that include certain prizes when savings goals are met.
8) Offer positive reinforcement:
Finally, when a child displays the ability to save, you can encourage them to keep up the good work by rewarding them with heart felt praise and sincere words of encouragement.
