Teaching Children About Saving for College: Part III
Want to involve your children early on in helping you save for college? This is our third blog post in a three-part series focused specifically on that topic. In our first post, we spoke about educating children on the value and importance of money. Our second post centered on how to teach your children the difference between a want and a need, and how identifying this early on can help them understand the value of saving. Once children understand that it's important to save, the next step is introducing a savings account and explaining how it works.
To start, you can take your child with you on your next trip to the bank. Explain to your child why banks are a safe place to store money. You might want to wait until he or she is older to explain more complicated topics, like interest, but even young children can understand the benefits of keeping money safe and secure.
Take your lesson a step further by letting your child set up his or her own savings account! You can open a savings account at any age. Encourage your child to save 10% of any money received from relatives or from an allowance. Letting your child bring some money to put into the account and fill out a deposit slip can help him or her feel really involved in the savings process. Then, the next time your child goes to the bank with you, you can take a look at the savings account and see how it's grown. Even if there's not much growth, just seeing that the funds can increase by keeping them in a bank can make children more inclined to keep putting money there in the future.
There's an interactive online game that can help kids understand the basics of banking. The Hands on Banking program lets kids explore concepts like saving and borrowing as they explore outer space.
If kids can see saving as a fun and worthwhile activity, it can be easier to get them to save for college. Talking up college and getting them excited for it can motivate them to put away some of the money they receive on birthdays and holidays specifically for college costs. If you attended college yourself, talk to your child about what the experience was like and how it allowed you to pursue the job you have. If you have relatives or family friends who are currently in college, take your child to visit and show off the campus. If a child has a more concrete idea of what college is, they'll be more likely to want to attend. Getting in the habit of saving for college at a young age will encourage children to continue saving as they get older until they step on campus.
If you would like to learn more about saving for college, we'll be hosting a webinar on Friday, October 14th at noon to provide an overview about college savings plans, how to set up an account, and why it's important (for you and your child) to start saving early. You can register for that webinar here. And if you miss the webinar, don't worry. We'll post the recording on our webinar page for you to watch anytime. You can also access great information and tips about saving for college on our website at mefa.org/save.