The family that saves together stays together. Working together to accomplish a common goal – and learning a little about frugality – will set your kids up for a lifetime of success.
Set a Goal – Having a clearly defined goal gives you purpose, especially when you are learning about saving. Decide together on a goal that your family can work towards. It might be a family vacation or a day trip you couldn’t otherwise afford, or something larger for the family to use together such as a basketball hoop. Not only does this give you something tangible to work towards, it also gives you the opportunity to teach an important financial lesson to your kids – if you can’t afford something, wait and save: reward yourself when you have the money instead of using credit.
Once you have selected your goal, figure out how much it will cost. This is another great activity that teaches kids to plan ahead and consider different options & their price difference. If your goal is a family vacation, look at how you will get there, how you will eat, what activities you will do and so on.
Break large goals into small, manageable chunks. One large goal can seem to take forever; break it up and you will see results faster, encouraging you to keep going.
Brainstorm Money Saving Activities – There are many different ways your family can go about saving money. Turn saving money into a game and always look for new areas to save.
One of the easiest ways is to create a list of family activities that cost money, and brainstorm cheaper substitutes. This could be entertainment or in areas such as your food budget. Instead of renting videos from the video store you could rent them from the library. Instead of going out to eat all the time, play “restaurant” at home. If you buy a lot of single serving foods for lunches, buy them in bulk and portion them out together or, better yet, bake your own lunch snacks on the weekend together.
Use these opportunities to teach kids about money and financial responsibility. You could learn about how electricity works in your home, how it is billed, and the things you can do to conserve electricity & save money. Teaching children early the connection between how long you must work to buy the things you want is an important life lesson. How long you have to work at a minimum wage job to buy those brand name jeans or new toy?
Whenever your family does something that saves money take that money you saved, or chose not to spend, and put it towards your goal.
Track Progress – Coming up with a way to visually track your success is a great way to keep all family members motivated and working towards your goal.
It might be a giant poster of a thermometer outline that your kids can color in as you reach incremental goals.
You could also build a collage representing your success. This is especially fun if you are planning a family vacation. Add a plane or train or car when you have saved up enough for transportation, add cutouts of shows, activities and tickets as you have saved for those. It breaks down the large goal and really shows children the process of saving and planning for a big goal.
Getting into the habit of tracking your success is something you can do throughout your life and is a great tool for children to master. When I moved out for the first time I planned for months. I figured out the cost for the first 6 months of all my bills, my rent, my food budget and all the big things I would have to buy. Then I made a whole page full of little thermometers. With each pay check, I deposited the money into one special saving account and divided it up among my page of thermometers until they were all filled up. It was a fun way to track my goal and I got an amazing amount of satisfaction watching my thermometers fill up. The sense of satisfaction and accomplishment is especially important when your goal seems very intangible.
Celebrate Successes – Accomplishing your goal is a big deal! So are accomplishing all of the little steps along the way. If you make it fun to work towards your goal, it will help keep you inspired and encourage success.
It can be as simple as praise and acknowledgment when mini-milestones are reached, or acknowledging when someone does something extra towards your goal. Make a special celebration of going to deposit your savings by combining it with another favorite family activity, perhaps going to a park or sharing a favorite meal.
Settings family goals is a great way to teach your kids about financial responsibility in a way that is not only fun but shows them the benefits and real world advantages to making smart financial decisions.
I was reading through my email and found an article from Trent Hamm at The Simple Dollar (my favorite personal finance blog) called An Ode To My Son’s Piggy Bank. A fantastic article that goes to show it is never too early to teach your kids about financial responsibility.
Is your family saving up for any specific goals? How do you teach saving strategies and financial responsibility to your kids? Please share!