Five Lessons that Five Dollars can teach your child
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3. What’s in the cookie jar? Start a new family ritual to empty your pockets of all the change you collect every day. Set a family goal to save at least five dollars worth of change a week. At the end of the month, your children can help you sort out and count the savings. Realizing that there is enough change to purchase a new family DVD helps children equate saving money with reaching financial goals.
4. Track her progress. Financial advisor Michael Butler recommends charting your child’s financial progress. “Reviewing complicated monthly statements don’t always provide enough instant gratification for young savers,” cautions Butler. Posting a goal thermometer or chart on her closet door provides consistent reinforcement for a child to maintain focus on her goal. A child working toward saving for a new bicycle will know exactly how much money she needs to achieve her goal. Additionally, Butler suggests that “reviewing monthly or quarterly statements with children solidifies the progress and potential you’ve reinforced at home.”
5. A little saved goes a long way. When Judy Parker’s 16-year-old daughter Meredith started working, she was delighted at the thought of finally spending her ‘own’ money. “She was not pleased when we urged her to start her own savings account to deposit her paychecks into,” says Parker. Meredith was determined to test her parents’ theory and decided that every pay period she would save the equivalent of five dollars for every day she worked. “At the end of the summer, Meredith had saved more than $1,000, enough to travel to Europe for her senior year class trip,” Judy says with pride. “I’m confident she’s learned the significance of saving money — even if it seems likes a small amount per paycheck.”