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Did You Miss “Teach Your Children to Save Day?”

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April 23rd was "Teach Your Children to Save Day" and if you missed it, the national day that was created to instill good savings habits in our children. Teaching your kids to become savvy savers and investors when they are young can instill lifelong positive financial habits in them, not to mention they will be less likely to come to you for money when they are adults.

Did You Miss Teach Your Children to Save DayMost parents don't take the time to teach their kids about managing their personal finances because most parents don't do it themselves. When you teach your kids about saving and spending you can look at it as a continuing education for yourself. Start as early as possible with simple lessons that help them understand the value of money, saving and spending.

Start by opening a bank savings account with your children, many banks and credit unions offer starter savings accounts. Many of these accounts also have savings rates that are higher than most rates available. Right now the best savings account rates and money market rates are just above 1.00 percent. You can find kid savings rates double that rate if you look around and compare rates.

Another important part of teaching your kids about personal finance is teaching them the difference between needs and wants. You probably heard your kids say the "need something" but in reality they just want it. Once they have an understanding of the difference you can teach them to save for the things they want.

The best money lessons in the world will be useless if your kids don’t fully understand them, you also need to make sure the money management lessons they are taught are appropriate for their age. As they get older you introduce new lessons and concepts to them that are relevant to their age.

Teach them that they should always put away a percentage of money earned into a savings account. If you're not doing this you should "pay yourself first", this is the only way you can consistently save money every month. When you teach your children give them the opportunity to actually save and manage real money.

You can give them an allowance or let them earn money doing chores around the house besides their regular chores which they shouldn't get paid to do. You can also tell them about all the house expenses that have to be paid, like rent or a mortgage payment, along with all other monthly expenses. I wouldn't recommend telling them the dollar amounts of these expenses, you can wait until they are adults or just before they go off to college.

A good website to help you is Money as You Grow, this site has information on teaching kids by age. This website can help you start a dialogue about money, saving and teaching your  kids important lessons about making the right choices. If you missed Teach Your Children to Save Day don't worry, you can always start today!

Author: Robert Till
April 27th, 2013