Teaching Your Kids the Value of Saving

Knowing how hard it is to get your kids to pick up their clothes, the thought of getting them to save for retirement gives you fits of laughter! Kids have the magic of time on their side—"tomorrow" is a million years from now and saving is not a high priority—especially with limited resources and so many choices for spending those few dollars.

As tough as it is, it's a parenting must to teach your kids the important skill of saving. There will come a day when they must save for a car, their first home and, yes, retirement. More and more states are adding a personal finance class as a high school requirement, but that's only one component of a good saving educational plan. Here are some other suggestions for teaching your kids about the world of saving.

Show, Don't Tell. It may sound corny, but the best lesson you can share is by example. Show your kids that you recognize the value and importance of saving. Share the details of your savings plan. Your kids will see saving as a normal part of your routine...a habit they'll continue.

Teach, Don't Train. Your goal is to teach your kids the value of saving, not to train them to chuck pennies into a jar. The difference is a commitment to saving as a lifestyle, instead of a grudging acknowledgement of your request. Skip the nagging and instead show how interesting it is to see your money add up, to watch a small sum grow into a larger amount on its own. That's the lesson that will last a lifetime.

Compound, Don't Confound. Kids need a simple plan or they'll lose interest—no pun intended! Playing the stock market might be fun for a day or two, but once the market has a downturn, your kids will no longer enjoy the lesson. Since the complexities of the market may be too overwhelming, chose a savings option that protects their savings and adds interest.

AAA can help you start your kids on the path to savings. AAA has partnered with Discover Bank to offer Certificates of Deposit, Money Market Accounts and CD IRAs, so members save more with exclusive rates and benefits. Click here for more information.

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