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Setting savings goals with your children

Setting savings goals with your kids

In terms of financial lessons, teaching your children how to save is one of the most important things you can do.

Given that even as adults we still struggle to have the necessary patience to reach our own savings goals, it’s easy to understand how difficult it can be to keep children motivated. Fortunately, there are a few steps you can take to help make sure things stay on track.

Open a savings account

Having their own savings account helps children feel they have ownership of their savings. It’s exciting for them because they can watch it grow over time. It also gives them a more realistic idea of what saving will be like as they continue to grow up.

Set a savings goal

Involving children in the process can be the key to success as they will be more likely to put more time and effort into reaching a goal that they themselves have decided on, as opposed to one set by you. Make sure the goal is achievable. You don’t want the goal to be too easy, but you also don’t want to make it so hard that saving ends up becoming a negative experience.

It’s likely that your kids will have a particular item they want to save for. But if they don’t, you may want them to focus on saving for the future. Once you have a goal, work out together how much is needed to be saved each week so that the goal can be met by a particular time. You can use our savings calculator for any help with the maths.

Your child can get first-hand experience of setting a savings goal and tracking their progress in the CommBank Youth app.

Put saving into practice

This is where your kids will need patience and you’ll need to help them stay strong. Once they start saving you can explain things like the interest they’ll earn on their money which may help to keep them motivated.

Your child can upload a photo of what they're saving for in the CommBank Youth app.

The key here is to stay involved but not overwhelm them as they try to save. You want to make sure it’s happening without putting too much pressure on. If it is going to take quite a while for them to reach their goal you can think about little rewards that could be placed along the way to keep spirits up.

The big pay day

You’d think all the work is done when kids reach their savings goal but not quite yet. Helping them reflect on the process will ensure that they get a grasp of how important saving is to reach many goals.

If the goal isn’t reached it’s important to understand what happened and have another go. The main idea of setting motivating savings goals with your kids is not about achieving success overnight, but rather taking your child on a learning journey.

 

Things you should know: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.