The 80/20 and any change rule

Molding the Beast: 101 l the importance of saving. 

80/20 rule

While money cannot buy happiness it sure can buy everything else in between. My son is 7 years old and last year I officially stopped buying him toys apart from his birthday and holidays. He has to learn how to start saving and buying what he wants on his own. This is a child that is accustomed to being given the world & that was cool because he was young. Yes, he is still young but he's now able how to add, subtract, and understand basic math concepts. To me this is equal to understanding the basics of money. 

So when he is given money it's either $1 or $5 and he has to count the amount he was given, add it to his total amount in his wallet, and subtract what 20% of that would be. To keep it simple I have him do it by every $10.

ex. $10 - $2 = $8 .... "So mommy I have $8 I can spend..." Simple. This actually excites him and when it is time to purchase something he starts thinking long and hard if he wants to be broke after his purchase. 

Any change rule

This is even simpler. My son has a piggy bank that he got from the credit union when I opened him an account (i.e. Beaut please open your child an account, it's free). Every time he gets any spare change from his purchases or finds any change around the house he puts it in his piggy bank. He cannot touch it, not even for a lollipop. Once the piggy bank is full I take him to the bank and we pour all the coins in the machine. He reads the number on the slip to me and we deposit it. Simple, simple, simple. 

A perk, my bank has an online option so every now and again I show him his account so he can see how it's growing from all that change. I make sure I explain to him that he is saving for something greater. He get's it. He has money, he's paid.  

So Beaut what do you need to equip your child to beast at saving? A wallet, a bank account, and a piggy bank. Simple. You end up winning too because when I'm on a budget if he wants something I tell him to buy it. He usually changes his mind.