One of the perks of being a kid is that you don’t have to worry about money. You have parents or guardians who look after you and provide for your needs. Nevertheless, learning how to save money as a kid is a financial decision you should make.
I started saving money at the age of 9. At the time, I lived with my aunty, who occasionally gave me pocket money. Since I didn’t have anything important to spend money on, it just felt right to save my money. I grew into an adult with this habit, and I can’t regret ever deciding to save money.
In this post, we will discuss some of the simplest yet effective strategies to help you learn how to save money as a kid. Even if you have never saved a penny, you will see how easy it is to build the habit of saving. So, relax while we briefly learn these money-saving methods together.
How Can A Kid Save A Lot Of Money?
To save money as a kid, you need to have a source of income. This means you can either get an after-school job or plead with your parents to give you pocket money regularly. If you don’t have a job, getting at least 10 bucks from your parents or guardian every week is a very good start.
Once you begin to earn money periodically, you can apply some basic strategies to save a portion of your earnings weekly or monthly.
What To Save Money For As A Kid?
As a kid, you can save money toward your financial goals. If there’s a particular item you would like to purchase, and you don’t want to ask your parents for help, you should save some money until you’re able to purchase it.
Besides, having some cash stored up somewhere can be a bragging right. You can beat your chest and say “I’ve got 75 bucks in my piggy bank”.
Benefits Of Saving Money As A Kid
Knowing how to save money as a kid has some fantastic benefits. I believe it is financial self-education since you are practically learning how to prepare for the future on your own. By the time you become an adult, saving money would already be a lifestyle.
Here are 5 important benefits of saving money as a kid:
1. Saving Money As A Kid Builds Confidence And Self-Discipline
Having money stashed somewhere makes you confident. As an adult, I don’t really have to worry about money. I’m pretty confident about my financial situation since I have savings in an emergency fund and my retirement account. As a kid, if you have savings, you will enjoy a sense of self-confidence most of the time.
For example, if your parents are unable to help you purchase something you need, you can remain confident knowing that your savings will take care of it. Truth be told, having your own money means you won’t have to ask your parents for anything. You can rely on yourself to an extent.
2. Saving Money As A Kid Prepares You For Stability In The Future
When you learn how to save money as a kid, you are preparing yourself for financial stability in the future. It’s important you know that most people succeed financially by saving a certain amount of money and then investing it wisely in a profitable venture. Once you get used to saving money as a kid, you will find it easier to reach your financial goals as an adult.
For instance, anyone who has mastered the habit of saving won’t be trapped in debt. Instead of taking a personal loan, they would rely on their savings.
3. Saving Money As A Kid Teaches You How To Build Wealth
Wealth is created by putting money into various businesses. Over time, your small investments will grow into big assets. Hence, the earlier you start saving, the easier it is to grab wealth-creation opportunities when you become an adult.
On the other hand, if you have any interest in building a business as a kid, you can fulfill your dream by saving money towards it. There are many businesses and money-making opportunities that kids can tap into if they have the financial capacity and skill set.
4. Saving Money As A Kid Prepares You For Emergencies
One of the main benefits of knowing how to save money as a kid is your ability to cover emergency expenses.
What would you do if your bike tire is punctured when taking a ride? If you don’t have any savings, you would have to ask your parents to help you fix your bad tire. But if you have saved up some money, you can quickly cover the cost. That is what it means to be prepared for emergencies. As an adult, I have an emergency fund that takes care of all my unplanned expenses.
5. Saving Money As A Kid Teaches You To Be More Responsible
There are different ways children learn to be responsible while growing up. One of them is knowing how to save money as a kid.
When you have savings, there are certain decisions you will have to make on your own. No one would help you manage your money or teach you how to curb your spending habit. These are financial decisions you have to make independently, and that is what it means to take responsibility for yourself.
As you make certain financial decisions, you will get to see how favorable or bad the outcome of your choice is. Over time, you will learn to do what is right and be responsible when it comes to personal finance.
10 Ways To Save Money As A Kid
It is much easier to spend than save. However, adopting the habit of saving can lead to financial stability. Here are 10 tips on how to save money as a kid:
1. Make Saving A Habit
The starting point of learning how to save money as a kid is to realize that saving should be a habit. It’s one of the top good financial habits that will improve your money mindset and help you attain financial independence.
To make saving a habit, you have to constantly practice it periodically. No matter how little the money is, you can save it daily, weekly, or monthly. Over time, this would become a part of you. You won’t even need anyone to remind you to save money.
For instance, brushing your teeth in the morning is a habit. This is because you have consistently practiced it over a long period of time.
2. Create Saving Goals
Setting up savings goals is one of the good ways to save money as a kid. This means you need to direct your savings toward achieving something. For example, if you want to purchase a game console, you can make it your savings goal. This can incredibly motivate you to save money consistently.
Another aspect of creating a saving goal is to determine how feasible the goal is. You need to figure out how much you are supposed to save and how long it will take you to hit your target.
More importantly, your saving goal has to be realistic. As a kid, you can’t save money to purchase a car worth tens of thousands of dollars. That’s not realistic. A realistic goal would be saving money for an item that costs a few hundred dollars or less.
3. Track Your Progress
One of the best money saving tips for kids is tracking progress. When saving money, I always like to measure my performance and monitor my progress. I want to see if I’m getting closer to my goal or falling behind. Tracking the progress of your saving goals can also motivate you to push harder.
As a kid, I recommend that you visually track your progress. GoHenry is a well-known app that can help kids create saving goals and track their progress anytime. It suggests how much kids need to save every week and automatically transfers the money from their spending account.
4. Use Money-Saving Apps
Using a money-saving app is one of the easiest ways you can learn how to save money as a kid fast. This is important if you intend to save money from a spending account. The money would be automatically withdrawn and saved in the app. That way, you don’t have to save money manually. Even if you forget to save your money, the app will take care of it. It’s like having a robot do all the work for you.
Besides, you are expected to set how frequent you want your savings to be. It can be daily, weekly, or monthly. Apps like Digit, Long Game, and Qapital are among the best options for saving money.
5. Earn Allowance
If you don’t have an after-school job, one of the quick ways to save money as a kid is by earning an allowance from your parents or guardian.
Most parents give their kids pocket money as a way of teaching them how to manage finances. Your mom or dad can provide you with pocket money weekly from which you can save toward your financial goals. Sometimes, you may need to prove yourself to your parents to earn this privilege. What this means is that your parents may be motivated to give you an allowance when they know you will make good use of the money.
6. Reduce Your Spending
Spending less is one of the best ways to save money as a kid. It’s easier to reach your saving goals when you aren’t spending money on unnecessary things. Do you like spending money on ice cream, chocolate bars, and donuts? Of course, it’s OK to have fun and eat what you want. But if doing this would affect your financial goals, you need to adjust immediately.
Spending less money means you will have more money to contribute to your savings account. This is why it’s important to set saving goals so you can be more focused and determined.
7. Talk To Your Parents
Talking to your parents about how to save a lot of money as a kid is important. Having financial discussions openly with your parents will teach you a lot. Aside from the lessons you will learn from them, you will be more confident in your goals. Also, talking to your parents might help you prevent certain money mistakes.
For example, if I were to teach a kid about money, I would share my experiences and some of the common mistakes I made as a young lad. From the information I shared, such a kid would learn about the roadblocks and mistakes in personal finance.
8. Set Daily/Weekly Spending Caps
You already know by now that one of the tips for kids to save money is by spending less. To curb your spending, I would advise that you set daily or weekly spending caps.
For instance, you can choose to not spend more than $10 every week. This will limit your spending and stop you from wasting your money at once. This strategy also looks like you’re building a budget. It’s all about limiting the amount of money you spend by focusing on only unavoidable expenses.
9. Understand The Difference Between Needs And Wants
Being able to distinguish between your needs and wants is one of the ways to save money as a kid. Ideally, your needs are things you can’t do without, while your wants are things that are important but you can do without them. As a kid, you may not relate to this since you’re not fully responsible for yourself. Your parents or guardian still look after you.
Notwithstanding, there are a few things you might be tempted to spend your pocket money on. If these things are not quite essential, there is no need to waste your money.
Sometimes, peer pressure might influence your buying behavior. Try not to fall for it. Other kids could be blowing all of their money, but you shouldn’t emulate such a habit. Try to ignore the pressure and focus on money saving ideas for kids.
10. Learn About Money
Finding easy ways to save money as a kid is important. However, learning about money itself is more important.
Bear in mind that money is a complex subject. Sometimes, it’s difficult to understand certain aspects of personal finance. But since you are still a kid, you actually have all the time in the world to educate yourself about money. By the time you become an adult, you will have learned so much. Your mind would be completely prepared to tackle and avoid financial difficulties.
Quick Summary: How To Save Money As A Kid
I believe I have shared some of the best strategies that can help you learn how to save money as a kid. Remember, you won’t start all perfect with your saving goals. But by merely deciding to save money, that’s already commendable. It’s a good start.
Also, ensure you set realistic goals. Take baby steps before you start reaching for more challenging goals.
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