STILLWATER, Okla. – This is the time of year when parents and grandparents may be wondering what popular new toys they should buy for their children and grandchildren.
This is also a good time of year to begin teaching young children about money management.
“Often children grow up with very little knowledge about the value of saving money,” said Sissy Osteen, Oklahoma State University family resource specialist. “Instead of buying children lots and lots of toys, take some of that money and help them learn the value of saving.”
Parents or grandparents who may plan to spend $50 on gifts for a child may opt to spend $30 instead. With the remaining $20, open a savings account for the child.
Adults can continue this tradition over the years, and as the child ages, he or she will have the opportunity to watch the money grow in the account.
“You’ll help children learn what compound interest is and how they can make their own money work for them,” she said. “These are valuable lessons that will help a child develop wise money-handling skills they’ll use for a lifetime.
“Obviously they aren’t going to enjoy seeing money instead of presents, but making savings fun and making plans about what it will someday be spent for makes an impact and helps them learn about delaying gratification.”
Parents may let the child have part of a cash gift to purchase something special and put the rest of it in savings. Once a child has saved a small sum of money, consider opening a mutual fund or purchasing a share or two of stock.