Sweets now or Lego later? Helping your kids set goals and achieve them is a great start with managing their money. Even young children can grasp the idea that by not spending on small things now, they can save up for something bigger and better. Skipping Haribo today might yet put them on the right track towards buying homes and holidays in future.
Talking About Saving For Goals
Chapter 02
Saving for goals
Fun Fact
Heard of the marshmallow test? In the 1960s, psychologist Walter Mischel gave nursery school children a choice: eat a marshmallow now, or wait a while and get two. Often, children with the self-control to wait were more successful in later life.
Chapter 03
Talking to your kids about saving for goals
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Want to get cracking? Here’s some ideas to start the conversation:
1
Small steps
Ask what they really, really want to buy, from stickers to a PlayStation. Discuss a savings goal that’s achievable, rather than an all-singing, all-dancing trip to Disneyland. Then break it down into smaller bits they can understand. So if they get £2 a week pocket money, and the Nerf gun costs £14, they’ll need to save up for seven weeks to buy it.
2
Slow or speedy?
When they want to spend at the shops, that’s a great opportunity to talk about faster and slower saving. Spending now means it will take longer to reach their goal. But if they save their pocket money, and pile up extra Christmas and birthday cash, they’ll reach their goal quicker. Let your child weigh up whether to buy now and wait, or speed up their savings.
3
Share your own goals
Kids can see contactless cards and credit cards as an unlimited source of money. Instead, start explaining your own choices to save not spend, for example, heading out to the local park rather than a theme park, so you can stash cash towards a family holiday.
Expert View“When teaching children about money, you need to start with short term goals. Talking about pensions would be about as interesting as watching paint dry. Instead, set a target that can be easily reached, such as saving £5 a month towards something special for a summer holiday, and show how they’re getting closer to their target each month. This helps them learn the power of saving and realise they can reach their goals without borrowing.”
Chapter 04
Having some fun with it
We all learn best by doing, so have fun putting saving for goals into practice:
1
Celebrate progress
Saving can seem to take forever for a child, so mark their small successes. Help your child make a chart, with a picture of their goal and boxes for every pound (or other achievable amount). Colour in each box, or slap on a sticker, every time your child saves some money. Seeing how far they’ve come is a great motivator.
2
Create a chore chart
Encourage your kids to earn extra by doing jobs around the house, to reach their savings goal faster. Make a list of small payments for tasks like tidying their room, unloading the dishwasher or brushing up leaves, whatever works with your routine.
3
Encourage eBay entrepreneurs
Ask your child if they have anything they’re willing to sell (although ideally not their siblings) to raise money for their goal. Then help them list stuff on eBay or Facebook, sell it outside your front gate or take part in a car boot sale. Next stop, The Apprentice!
Expert View"When my children were clamouring for an Xbox, my husband and I agreed to match any money they raised. Reminding them how close they were getting to their goal helped them stop spending until they reached it."
Chapter 05
Other helpful bits & bobs
How NatWest Rooster Money can help
Saving and budgeting are important lessons when teaching kids about money. With Rooster Money kids can create their own Savings Pot to learn about saving toward their goals.
The Rooster PotsEncourage your child to add an image of what they are saving for, to help visualise their goal.
Using GoalsWith a Rooster Card subscription you can set jobs, so your child can earn extra cash. You can even set up an interest rate on their Pots to incentivise saving.
Find out more about the Rooster Card