"Lawn mowing, pet sitting, lemonade stands, and other summer jobs can definitely help children to become more responsible and build self-confidence. The money they earn by doing those jobs can provide opportunities for parents to teach them how to manage it, maybe even open their first savings account," said University of Illinois Extension consumer economics educator Kathy Sweedler.
"At around age 12, children can use a savings account to help regulate their spending and can understand the importance of saving money regularly," Sweedler said. "At a younger age, it may be more useful to have children save their money in a piggy bank or glass jar where they can literally see their savings grow."
Sweedler says in developing the ability to save money, much like other skills in life, practice makes perfect. "Do your children have an opportunity to earn money and then decide how to spend or save it? As parents, we can help provide these decision-making opportunities.
"Giving your child an opportunity to save money toward something he or she wants is a terrific learning experience and helps develop the saving habit early in life," Sweedler said. "A research study conducted at the University of Pittsburgh found that children who have their own savings accounts when young are likely to continue saving in later life."
Children can benefit from the experience of managing money at a younger age than one might think, she said. "I read an article titled 'The Case for Extending Financial Inclusion in Children.' It said that children as young as five or six years old can recognize that saving is a good idea, and by age 12 children have the capabilities to use and benefit from having a savings account."
The President's Advisory Council on Financial Capability is concerned with helping children become financially savvy consumers as adults and has developed a website called Money as You Grow, which can be found at moneyasyougrow.org.
"I like the information on the website because it outlines some of the financial concepts that children can learn at age-appropriate times," Sweedler said. "For example, a five year old can learn that you may have to wait before you can buy something you want. By age 13, the money lesson may be that you should save at least a dime for every dollar you earn."
The website also has suggested activities and resources for families. "As you talk to your children about money, remember that children develop at their own pace, and the activities designed for certain ages are intended as guidelines," Sweedler said.
Sweedler also recommended two helpful books about money that parents can share with their children. "A Chair for My Mother by Vera B. Williams is a wonderful, warm story about a family working together towards a shared financial goal," Sweedler said. "Lunch Money by Andrew Clements is geared towards older elementary- or middle-school readers and features two enterprising youths. Those are just two that I like, but there are many others at the library."
Sweedler offers more financial tips via Twitter at @morethancoupons or on her blog located at www.extension.illinois.edu/go/RetireWell .
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