How to Get Kids to Save Money

Here are a few suggestions from Kiplinger's on how to get kids to save money:

One way to encourage them to save is to give them a goal, preferably one they can accomplish in a manageable amount of time. For the younger children that could be a coveted toy, a jersey from their favorite team, a new baseball glove, even an outing with Gramps. For the 13-year-old, it could be a new computer or a school trip.

Once kids are teenagers, you can expand on those early lessons and hit them with the best trick in the book: the magic of compound interest. More than any other lesson, using a calculator to show how fast money grows seems to make a big impression on teenagers and young adults.

Not bad suggestions.

Here's how we do it:

1. Any money our kids get go into three jars: giving, spending, and saving.

2. The giving jar is a mandatory 10% of everything they get and goes to our church. They can put in more if they like (which they both always do), but 10% is the minimum.

3. From there, they can decide how to split up the remaining money into the spending and saving jars. It's usually about a 50/50 split after all the giving is done.

4. The spending money is then used for immediate, "I want this now" sort of purchases that are usually relatively low cost. For example, each of the kids recently spent about $10 to buy a super soaker water gun. Before that, my son bought a new basketball he wanted.

5. The savings jar is for longer-term goals -- items that are usually much higher in value. For instance, my son recently saved to pay part of a new bike he wanted (we paid the rest). He's currently saving for a video game system (assuming he can get the approval from my wife). I'm not sure what my daughter is currently saving for at this time.

We haven't yet started making them put away some money for college, though we'll probably start that soon. As I've said before, they will be responsible for paying half their way to college, so they need to get started!