Trying to get kids to save money is kind of like peeling Dad off the couch during Sunday afternoon football. You are not likely to get a good response without some serious prodding. Still, teaching your kiddos is an important life lesson and ensures that they won’t be living with you when they are 28 years old.
Teaching kids about saving money is a hard task, add-on getting your kids to even to even think about college (and saving for it) before the age of fifteen. So how to you get kids to save money for college?
Is that even possible? (Can they actually think beyond their next text message?)
The answer is yes, it is possible. BUT, you have the be the catalyst to make it happen.
The first thing you have to do is teach them that different choices can equal different outcomes. To get kids to save money, you have to show them the payoff at the end. That is rather easy when it is for a favorite doll or comic book, but showing them the benefits of a saving for college education is not so easy. The key here is to start early. In our household, we have been using the phrase “when you go to college” since they could talk. If you were to ask them, they’d both tell you they will be going to college after high school.
Go to your local bank and set up a fund in their name. Let them physically go and deposit money in their accounts. That habit is vital to their future finances. The money is one thing, but the habit is something that will follow them the rest of their lives. Either make it a percentage of their allowance or birthday money. Plus, they will love being about to watch the number go up and “dream” of what they could do with the money.
Put a college expense plan together. Until you and your kiddo spend time figuring out the total expenses for a year in college, it is a little hard to save. By writing down all the costs (tuition, room, food, books, fees, parking, spending money, etc.), you’ll both have an idea of the costs involved and can make a savings plan together.
Have them understand not only the how of saving, but why they are part of the equation. I’m a firm believer that without skin in the game, you can take things for granted. It is no different for a college education. Letting your kids know from an early age that they will not be getting a free-ride in college helps them understand that they are part of the saving equation. In order to go to college, they will be in charge of paying for part of the expense, period.
Educate your children (and yourself) on the other options to pay for college. Not only is it important to save money for college, but it is also important to try to get all the free money you can via scholarships. I know many families who have a 50/50 plan for college expenses (50% on kids and 50% on adults). In that equation, any scholarship money goes toward the child’s part of the expense, so it rewards good grades and the time it takes to fill out applications. If you have younger kids, you may starting asking your friends what criteria college scholarships look for…in many cases community service hours are super important as well as a job outside of the home.
With all of that being said, I understand my kids saving money for college will not pay their way through or probably even make a dent in the total costs. But having them understand the costs involved will help them make smart choices while they are at the university.
(PS: For all of my KC Peeps, you have to checkout this resource from the Federal Reserve Bank – Money Smart KC. It’s a FREE resource that hosts workshops and more throughout the area to help people understand the ins and outs of money/investing/saving/etc. And since it is the Federal Reserve and not a bank, there is no sales pitch at the end.)
What about you? What tips do you have to get kids to save money for college?