Whether your kid receives money in the form of a birthday gift from Grandma, a reward for good grades, or a weekly allowance, the time is always right to help him learn how to budget. Some tips:
Give him a reason. If your child has been eyeing a new video game or soccer ball, help him find incremental ways he can save up for it (by earning $2 for each night he helps fold laundry, for instance). Show him his progress by drawing a poster with a thermometer that “fills up” as he gets closer to his goal, suggests Mackey McNeill, a personal finance specialist.
Match savings. Big-ticket items might require a long-term savings plan, which can be hard for younger kids to grasp. If it would take more than a few months for your child to save up for something on her own, try matching her savings to keep her motivated, suggest Bryan Link, CEO of the financial planning group SimpliFi.
Be a role model. Tell your child about the financial goals you’re working toward, like a backyard pool or family vacation, Link says. If you share your savings plan with her and track your progress together, she’ll be more likely to save money for her own goals.