Teach Children to Save Day
Teach Children to Save Day is celebrated annually on April 28 as a reminder of the importance of financial education for children.
What is financial education?
Financial education is key to developing money management skills that can last a lifetime. According to EVERFI, “Developing wise financial habits at an early age can help encourage responsible decision making and a healthy relationship with money before adulthood.”
Saving is an important component of financial education. No matter the age, it is never too early to start educating children on how the banking system works, especially with a savings account. Through routine experiences with saving, children can become more comfortable with developing their budgeting and savings skills and forming sound financial habits.
Start small and early
Perhaps your son or daughter has started earning a small amount of money from doing chores around the house or by helping a neighbor. As their piggy bank fills up, have a talk about the importance of saving and wants versus needs. When your child gets accustomed to regularly saving a small percentage of his or her funds, advance the conversation by introducing the idea of a savings account. You can help generate excitement as your child stows some of their chore money or birthday funds into an account and watches the money grow. You can also highlight how earning interest is one of the benefits of a savings account.
Create teachable moments
Teaching a child the value of budgeting and saving early on can help them learn about the impact of impulse purchasing. There may come a time when a young saver will want to use some of their saved funds for a popular toy or gadget, only to realize later that they don’t have enough money saved for what they really wanted. This type of “learning lesson” will stick with them as they grow and begin to make more significant purchases.
Rather than you buying an item that your child wants, encourage them to save the money needed for the purchase. Implementing a little delayed gratification can build your child’s confidence, as they are able to purchase the item through their own efforts. This can begin with whatever your child is most inspired to save towards, such as something small like a new pencil case or larger like an electronic device.
It is important that your child sees you following sound practices of budgeting and saving too, as they will likely model their own financial behavior after yours. Create opportunities to discuss your family’s budget and goals, like saving for a vacation or a new computer, on a level they can understand. Try to also create ways that your children can contribute towards the family’s goals.
Starting a savings routine at a young age can help create positive habits which can make a significant difference as children grow into adults. In fact, a report filed in 2020 by Statisica cited that one in every two children in the United States had a savings account. Trustmark offers a Youth Savings Account designed for the basic needs of young savers. There is no monthly maintenance fee and an ATM card comes with the account.
Another great resource to utilize is Trustmark’s Financial Education Toolkit, an online learning platform provided by EVERFI to aid in teaching the basics of money management. The toolkit introduces a variety of financial concepts that are engaging and easy to understand.
For more information, visit your nearby Trustmark branch and speak with a Financial Services Representative to help your child start their lifetime of saving.