Financial Literacy 101: Learn the Value of Delayed Gratification
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on Thursday, April 11, 2019
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Education
Learning to save money successfully is a habit acquired over time. The best way to instill that habit is to teach it to children when they are young. In honor of National Teach Children to Save Day on April 12, Northwest Bank is encouraging consumers to teach their children the benefits of delayed gratification.
Delayed gratification requires patience above all else. Admittedly, when dealing with kids, patience is not always the first thing that comes to mind. But if children can master this skill early in life, it may lead them to greater financial responsibility and security in the future.
One way parents can teach their children delayed gratification is through their children’s savings accounts. While opening a savings account is a great first step, children also need to learn how to use those accounts to reach their financial goals. By using the following steps, parents can teach their children financial responsibility while also instilling in them the value of delayed gratification.
- Set goals. Work with your children to create a list of what they want to achieve with their savings accounts. Set a realistic goal for them to save by the end of the year. If they want to save for a specific item, help them set a higher goal for their savings account to cover their standard savings and special item purchase, so they don’t completely deplete their savings when they make the purchase.
- Create a budget. Although most children do not have bills, parents can teach them to budget by helping them keep track of their money. A simple budget can help them realize how much income — allowances, gifts, paychecks, etc. — they receive each month. That will give them a better idea of how much they can spend while still saving a specific monthly amount that will help them achieve long-term goals.
- Examine results. Review monthly bank statements with your children, so they can see how saving is paying off. By seeing the month-to-month growth, they will not only see the value of delayed gratification, they also will see instant gratification as they watch their savings grow.
- Reward accomplishments. Saving can be hard and delaying gratification takes a strong will. Make sure you celebrate and reward your children when they reach savings milestones. Rewards could be something as simple as a dinner out at a restaurant of their choice, but make sure rewards are set ahead of time so they know what they’re working toward.
Contact us to learn how to open a savings account with your child and about the programs available at Northwest Bank that encourage children to save.