By Amy Miller, AFC®
Military Saves Week is in full swing. This year’s theme is “A Financially Confident You”. During the week, Military Saves has worked to elevate conversations that encourage military families to take control of their finances and set realistic goals for their future by touching on five important areas through daily themes and events. This year’s themes include:
Monday, April 24th: Saving Automatically
The simplest and most effective way to save is to set up automatic savings.
Tuesday, April 25th: Saving for the Unexpected
Having short-term savings is essential to overall financial stability and boosts your financial confidence.
Tuesday also featured the launch and kick-off for a brand-new campaign – Veteran Saves, offering information, tools, and resources focused on meeting the financial needs of our Veterans. AMBA, the Defense Credit Union Council, and America Saves have partnered to bring this new campaign to the Veteran community.
Wednesday, April 26th: Saving for Major Milestones
How to save for competing priorities.
Thursday, April 27th: Paying Down Debt is Saving!
Freeing up cash flow to allow for saving contributes greatly to financial confidence and stability.
Friday, April 28th: Saving at Any Age
Saving is a habit, not a destination and you’re never too young to start learning and implementing positive behaviors that can build lifelong confidence.
Military Saves Week features free online events including a virtual town hall discussion, webinars, and podcasts that focus on encouraging everyone in the military community to focus on financial wellness. They are available on the Military Saves Youtube channel.
Saving at Any Age – Teach Your Children to Save Day
Military Saves Week ends with “saving at any age”. National Teach Your Children to Save Day is also recognized this week to highlight the importance of teaching our youth about saving money.
According to Statista, around 39% of U.S. children ages 8 to 14 years old had an open savings account in 2022. However, a T. Rowe Price Parents, Kids, and Money Survey showed that 37% of parents say they don’t talk to their children about money or how to save. Many expressed that they were never taught themselves and have learned through experience and a lot of trial and error, leaving them unsure about how to have an effective discussion about the importance of saving.
Saving is one of the most important skills that parents and caregivers can instill in children. Even though Military Saves Week is coming to an end, here are some steps you can take to help your children build savings habits that will last a lifetime!
Start the Conversation
Openly discussing money and the importance of savings is one of the most important things you can do to teach children the basics of money management and saving. It doesn’t have to be scary – start with a simple conversation about earning, spending, and saving.
Set Savings Goals & Provide a Place to Save
For younger children, a piggy bank is a great place to start. Make a plan to fill the piggy bank and then use that money to start an official savings account at a financial institution. Discuss the amount they were able to save and how it can grow by continuing to save and by earning interest.
Talk about Wants vs. Needs
Discussing the difference between ‘wants’ and ‘needs’ is a great way to help children recognize the value of saving. For example, needs are things that take priority over others like housing, food, and clothing while wants are extras like vacations, concerts, or the newest toy or electronic device.
Encourage Earning
There’s no better way to learn the value of a dollar than by earning it. The T. Rowe Price 2022 survey also found that three-quarters of parents say they pay their children an allowance each week, averaging almost $20.00 per child, per week. Teaching children how to earn their own money and how to spend and save it is the beginning of creating healthy saving habits and money management skills.
Offer Incentives or a Savings Match
Incentives and free money are often big motivators, especially for children. As a parent or caregiver you may want to try to incentivize saving by contributing a certain amount or percentage to what they’ve saved. For example, match what they can save during a specific timeframe or when they reach a certain savings goal.
Lead by Example
Alexandre Dumas, the author of The Count of Monte Cristo & The Three Musketeers, said: “Instruction is good for a child; but an example is worth more.”
This statement still rings true today. If you want your children to be savers, you’ll need to be one as well.
Developing your own strong money management skills and a habit of saving is the best way to encourage your children to do the same.
Our life experiences directly influence and shapes our relationship with money. Having discussions about money, and teaching how to track spending, budget, and contribute to a savings account is critical to creating positive money mindsets in children. If learned at a young age, this mindset can build healthy habits that will lead to less financial stress in adulthood.