Kids often have a difficult time understanding the value of a dollar. It’s important to always be encouraging children to care about finances at a young age. By having them participate in a money challenge, though, you can start teaching them the importance of financial responsibility early on in life.
Developing a savings habit can make kids excited about money too. Before starting any kind of challenge with them, take a moment to discuss the following:
- Help them understand. Make the saving process relevant to them. If they save $5, they can buy (fill in the blank). If they continue to say $5, they will have $X for future purchases. (College, for example.)
- Work with them on a goal. Working on this aspect of saving will show them how important it is to make goals with money. Making this point clear in the beginning will make it clear what their savings will be used for.
- Determine where the money will be saved. Discuss and make sure they are OK with a plan of action for saving the money. If you put it in a bank account you already have for them at the end, give them an idea of how the process works. Keep their age in mind though; a four-year-old may not understand much involving banking. Since they will primarily be doing all the work for this challenge, make sure they are OK with what is decided. This process will help with providing some accountability.
- Determine how the money will be earned. This is another very important lesson to teach your little one and growing child(ren). Whether you agree upon chores or a reward system for exceptional behavior or exceeding expectations, there are a few clever ways you can do this that suits your household.
For those little ones just learning to count, the One-Year Penny Challenge may be your best bet.
The One-Year Penny Challenge
There are many ways to approach this money challenge, but a penny a day will be easy to manage for the younger aged children learning to count. You may want to use a jar for this one.
Here’s how it works:
- Day 1: Start with $.01
- Day 2: Put in $.02
- Day 3: Put in $.03
- Day 100: Put in $1.00
- Day 365: End with $3.65
You can turn this into a 52-week challenge as well. But, the overall savings will be $13.78 versus $667.95 for the 365 challenge deposits. If you would like a template of the 52-week challenge, you can download it here. What you decide to choose with the penny-a-day challenge will be dependent upon you and your child.
Another money to try with your older kids would be the Save by the Month Challenge.
Save By the Month Money Challenge
As your child starts earning money, you can show them a clever and easy way to easily save using this route. While there are multiple challenges, this is one where all they have to remember to do is deposit the amount based on the number of the month.
Here is what we mean:
- Week 1: $9
- Week 2: $9
- Week 3: $9
- Week 4: $9
- Week 1: $10
- Week 2: $10
- Week 3: $10
- Week 4: $10
- Week 1: $11
- Week 2: $11
- Week 3: $11
- Week 4: $11
And so on. The total amount saved from this challenge will be $340. While that may not seem like a lot, to your child it will be. Be sure to help them keep their goals in mind for this money. Remember, the ultimate purpose is primarily to teach your child about the importance of saving and money.
Hopefully, you can encourage them to do the same challenge again or save a specific amount each week…like an adult!
Zero Effort Money-Saving Hacks
Throughout the last few years, there has been an explosion in applications for your smartphone designed to help you save money. One of the best savings apps on the market is Empower. Empower analyzes your savings account balances and automatically makes withdrawals that are placed into savings for you. Once you’ve installed and activated the app you have a way to save that takes virtually no effort. Empower does all of it for you. Download the Empower app now