Money-management skills, like saving money, are best developed through diligent practice; knowing how to budget and save aren’t innate talents. People need teaching to learn how much and how often they should save. You might have to correct correct poor habits such as impulse buying before teaching good ones. No degree is required to teach a child, teen or adult how to save hard-earned cash. Use practical phrases and visual aids to instruct a student on how to save money.
- Toy circular
- Play money
Give a child an allowance every week to provide him with a regular money supply. Present the child with $1 bills in the amount you determine. Breaking up the money, instead of just handling a $5 bill, will make it easier to teach savings.
Ask the child to lay the money out on a table. Help the child look through a sales catalog to find a toy or article of clothing he wants. Look at the price.
Count the money out loud and compare that with the amount of the toy the child wants. Explain to the child that he doesn’t have enough money, yet, to buy the toy. Tell him he must save to get the toy.
Lead the child to decide how much he’ll save each week to get the toy. For example, if the toy is $10 and the allowance is only $5, tell the child he must save for two weeks. If he wants spending money, encourage him to keep $3 each week and save $2. Tell him that by saving $2 a week, he’ll have the right amount in five weeks.
Help the child count his money and save it every week.
Present the teenager with $500 in play money. The play money should be in different denominations to make paying easier.Tell him this is his “paycheck.” Talk to him about how much he should save each week or pay period.
Decide what amount the teen would like to save. The amount should be between 10 percent and 20 percent. Take that money and place it in a clear, glass jar.
Ask for 10 percent of his paycheck. Tell the teen this is for the taxes that will be deducted from his pay. Ask for $100 for his car insurance then tell him to count the remainder.
Request another $100 for food and entertainment. Talk to the teen about the importance of leaving savings in place and living on the allotted amount.
Demonstrate how much the teen will save over six months. Add the correct amount to the jar. Take the money out and allow the teen to count it.
Ask the adult to choose an amount he’d like to save. Make a budget of household and personal expenses. Compare this amount with the individual’s income.
Decide how much the person should save every week to reach the savings goal. You may have to help the person realign his budget to meet the goal faster.
Encourage the person to open a savings account and make deposits every week.