Teaching Kids About Saving Money

It is a good idea to teach kids about money at an early age. I've found that the whole concept of saving to them is overwhelming. So I believe that the earlier they learn the better. Nip those spending urges in the early years and everyone will be better off.
One of the first things that I attempted to teach my girls was the difference between a penny, nickel, dime etc... They were all very smart and learned a lot of things at an early age, their memories sometimes amazed me, but try to teach them the different coins and you would have thought it was trigonometry. They all seemed to have trouble with remembering what was what. My husband said it was because they were girls and would never grasp the concept of money or savings. One dirty look from me and he said he was just kidding...??? Anyway, we stuck with it and they eventually learned. I think the most important thing is to make it fun to learn and save. Here are some of the things that I've tried with my girls even before they were 5.

• Made flash cards with the coins attached. It was a good way to teach them to spell the words too. ( I think they learned how to spell the words before they remembered what each coin was). If they remembered the name of the coin, I would give them one for their bank. Which brings us to the next step, a piggy bank.
• The bank they use should be something fun. They've had all different kinds, from see-through, to electronic, to an actual "piggy" bank. One of their favorites is a simple plastic Clifford about 6 inches long where they put the money on top of his head and it rolls down his back and into his body. Whatever they choose, make it something that they will want to use. If they get bored with it and want a new one, make them save up for it.
• When they want to buy something, I let them bring their money to the store, pick out what they want and pay for it themselves at the counter. Sometimes it's a good idea to do this when it's not so busy, as they have all paid in coins for things upwards of 5 dollars. The clerks are not always so thrilled, but they are usually helpful and understanding.

Now that my two older girls are 8 and 10 they are of course asking for more high priced items that "everyone" has. Here are some of the things I have tried with them.

• They make a list of their "financial goals". Either how much they would like to save by a certain date, or items that they would like to buy. Then they begin to save with these items in mind. If they want a pair of shoes that cost $20 more than I would normally spend, then they need to save the $20 and I will chip in the rest. Knowing what they want and how much it costs will either cause them to save better, not spend their money just because they have it or they may realize that it's too much money and that they don't really need it because there is something that they want even more.
• Explain to them the concept of bank interest. They like the fact that if they put their money in the bank rather than keeping it at home, they will get more money from the bank. I know it's not much, but to them it's like getting something for nothing. When they receive money as a gift, I try to have them put part of it in their savings account. I don't force them to do this, but most of the time they are receptive to the idea knowing that they will earn even more.
• I've let them sit with me while paying bills so that they can see where our money goes every month. Then they realize that the money that comes in needs to go out so that they can live in their house and have lights and tv and heat or air conditioning, etc...
• Let them earn money at home by giving them extra chores, like raking leaves, helping with yard work, washing the car.

These are just some of the ways I have gotten my girls interested in saving. I've found the most important thing is to make it fun and interesting. I am always looking for new ways, so if anyone has any ideas, let me know.