How to help your middle or high schooler set a savings goal
You can instill a savings habit that serves your child well into adulthood.
Most parents know that kids aren’t good at delaying gratification. Teaching them how to save money can be a challenge, since the payoff isn’t immediate like it is with spending. You can make it easier for your middle or high school student by putting the concept of saving into practice: Encourage her to set a savings goal, something she’s likely to do over and over throughout her life.
With just a few simple steps, your tween or teen can be well on her way to accomplishing her goal and gaining a skill that will serve her well for years to come.
Begin with the goal
Start with a relatively short-term, tangible goal—the more distant or abstract it is, the harder it is for your child to visualize. Consider items she can save up for within a few weeks or months. Once you’ve set the goal, determine the exact cost of the target item.
might save for video games.
might save for designer sneakers.
Create a plan
The next step is for you and your child to determine how long it will take for him to save enough money to buy his goal item. This calculation will be based on how much he already has saved, plus how much he can put aside from his allowance or earnings or any gifts. You might consider explaining to your child how different online savings tools can be useful. For example, Bank of America’s Savings Goal Calculator can help you create a savings plan.
might get an allowance or earn cash from odd jobs such as mowing a neighbor’s lawn.
may have a regular income stream from an after-school job.
For pricey items, consider matching contributions. Whether you match each dollar your child saves or chip in a specific amount once he hits his goal, you reward your child’s efforts and help him reach the goal faster.
Encourage your child to set aside a portion of any money he earns or receives. He may want to save a fixed amount each week or a percentage of his funds. Depending on your child’s savings goal, you can explain how putting away a greater percentage of his money will help him reach his goal more quickly.
This may also be a good time to explain basic banking to your child. You can explain how accounts can help protect his money, and other basic banking concepts such as interest rates, withdrawal limits and fees. Once your tween or teen understands the basics, you might consider opening a bank account with him.
Consider opening a savings
account. This can teach your tween how banks work and about topics such as interest.
If your teen has a job, consider a checking account. Discuss direct deposit or automated transfers as savings tools.
Record and reduce expenses
One way for your child to save more is to spend less. That’s probably intuitive for you, but you can help your child grasp this concept by creating a budget. You could encourage your child to record his monthly earnings, savings and expenses in a journal. Ask him to record why he made each purchase. This will help him learn the difference between necessary and discretionary spending: the must-haves vs. the nice-to-haves.
Your child may not be aware of how much he spends on snacks until he sees it in black and white. He might decide it’s worth skipping the trips to the vending machine in favor of food at home if it means he can contribute more money toward his savings goal.
Track progress together
Monitor your child’s progress at regular intervals to show him the headway he’s making. You could do this at family meetings, if you hold them, or just check in from time to time at the dinner table. Your child can see how steady contributions—even small ones—make a difference over time.
Consider using visuals.
You might display a picture of the goal item or a chart that tracks his progress.
Try to sit down together once a month or so to review bank account balances.
You can use these check-ins to evaluate your child’s success and discuss potential adjustments—working more hours or saving cash birthday gifts instead of spending them—to help reach his goal faster.
Whether it’s a gadget or a car, setting and reaching a savings goal is a rewarding process. It can give your child a sense of empowerment and accomplishment while building the basic skills he needs to navigate his financial future.