Here are some ways to show your children that saving — and giving — can be just as rewarding as getting.
Hand over the spending power. Tired of dictating how your kids spends their money? Give your children control over a weekly “entertainment allowance” and see what happens. Children who are free to spend their money on whatever they want tend to be more thoughtful and less impulsive.
Make dollar decisions tangible. If it’s hard for adults to visualize mounting debt or increased savings, imagine how abstract these concepts are to kids. Visual cues can help. Illustrate important allocation lessons of short-term and long-term savings with separate piggy banks or savings accounts, or with a running tally on a whiteboard.
Reward savings behavior. Positive financial reinforcement is a powerful tool. Encourage responsible cash conduct by making it worthwhile every time your child decides to save instead of spend. Set up a “junior” version of a 401(k) and offer to match money they sock away for themselves and others (e.g., 50 cents for every dollar they save for themselves, or a dollar-for-dollar match for money they raise for a good cause).
Let them pick a charity. Giving is just as important as getting — and that good feeling can last a lot longer than the giddiness over a new iPhone, gadget, or toy. Involve your children in charitable acts. Get online together and find a cause they can relate to. Or find a local charity and take your kids there to see firsthand how their bequests will help. Have them deliver the donations (cash, toys, clothes, etc.) themselves.
Get them excited about stocks, not stuff. The stock market (and the passage of time) can reward the little ones in a big way. Engaging kids in investing pursuits is easy: Just explain that when they buy a share of stock, they become part owners of the company, not just a customer. Show them how they are surrounded by investment ideas, starting with names and items they will understand such as snacks (Kraft and Coca-Cola ), entertainment (Disney and Netflix), and electronics (Microsoft and Sony). And if saving money to buy more stock replaces saving money to buy more stuff, even better.
Show your gratitude. The most powerful illustration of the good that comes from giving is gratitude. Share how grateful you are to be able to afford new school supplies and how much you appreciate gifts (tangible and intangible) from others. Talk to them about how you are paying it forward, and openly share the joy you get from helping others. Being thankful is a lesson worth revisiting year-round…for kids of all ages.