Teaching Children About Saving for College: Part II
In our previous blog post, we discussed how helping children understand where money comes from can help them understand why it's important to save. But one of the biggest barriers when it comes to saving money can simply be that there are so many options for spending money. How do you teach children to be smart consumers and to save money while still accounting for every day expenses? One way to do this is to teach them the difference between a want and a need.
A want is something that we would like to have, but can live without. A need is something that is necessary to our survival. When children understand how to prioritize their needs over their want, they can then learn how to put away extra money for needs that will emerge in the future, such as college.
A good way to teach children the difference between the two is to let them go "shopping" with printable cut outs of money. Letting them learn how to pick one item over the other is a great way to teach them how to prioritize with money. If your child would prefer an online game, visit EconEdLink and play Perfect Pet. Children are given the responsibility of owning a pet fish and have to pick which items they want to purchase using only $5. They have to choose between buying a necessary item, like a fish tank, over one of the fun items, like a starfish.
Games like this can be a good segue into conversations about saving. You can discuss with your child that sometimes, instead of spending extra money on something we want but can live without, we can save it up for something we will need in the future. One of the biggest needs children will encounter in the future is college. Teaching them financial literacy skills as early as possible is the best way to ensure that they make smart money decisions throughout life and can play a part in helping your family prepare for future college costs.