It is important to teach your child the value of saving early in his life. If he understands the value of saving, it could make a very big difference in his life, in his future. Here are some ways to teach your child how to save:
You can start with a piggy bank, which to a toddler can fall under the category of toys. You can weave the learning of saving with his play. Give him a real piggy bank or some variation of it, like a large plastic bottle or a box with a slot for the coins to pass through. Make him understand that the purpose of the piggy bank is for storing money. Start to explain that what is important is the act of saving and not the actual coins that accumulate in the piggy bank.
When the child grows older, you can give him his first wallet. Guide him through the transition from collecting coins in his piggy bank to learning to handle paper money and understanding the power of currency: how it can buy things and how one easily can lose all his money if he is not careful with his spending. It is during this stage that you can see if your child is a saver or a spender.
You can then move from the wallet to the savings account. If you have guided your child properly from the beginning, she should be able to save money in her wallet. Being able to keep one’s self from spending what is in one’s wallet is actually a feat for a child, and it must be recognized and rewarded. The idea of having a bank account could builda lot of self-esteem in your child, which she could use in decision making in the future. But, of course, you need to explain things like the minimum amount of money required to open a savings account and how money is safe when it is in the bank.