TOPIC:

The Importance of Saving

RESOURCES NEEDED:

• Two types of treats that your child would really want – one being more special than the other – keep both hidden from view until the appropriate time in the game.
• Some small change – such as a dime or a quarter.

LEARNING OPPORTUNITY:

It is important for children to learn the importance of saving and to avoid impulse buying. If they can develop an understanding of the need to save and manage money carefully at an early age then they will be better prepared to manage their finances wisely as adults.

THE ACTIVITY:

• Give the child the small change that you brought for the game.
• Tell the child that he or she is going to have to make a decision about what to do with that money.
• Show the child the two treats that you have and tell them that they can spend their money and buy the lesser of the treats now or they can wait a half an hour and buy the better treat. Their third chose is they can chose not to buy either treat and save their money for some future use.
• Let them make the choice.
• Ask them to explain the reason for the choice they made.
• If the child chose to save the money, discuss with them the importance and value of that decision, and praise them for having the discipline to forego immediate purchase. (Perhaps you might even want to reward them for their choice by treating them once the activity and conversation is over.)
• If the child chose to buy the lesser treat from you, then accept the money and give them the treat. Talk to them about the idea of deferred reward – holding off on purchasing something until later when you would get more value for your money or need it for something more important – the idea of saving for a rainy day.
• If they chose to wait a half hour then, after that time has passed, conduct the transaction with them.
• At that time, reinforce with them the idea of deferred reward – holding off on purchasing something until later when you would get more value for your money or need it for something more important – the idea of saving for a rainy day – and praise them for having the discipline to wait for the better return on their money.
• You could even follow this up by talking to them about the idea of doing something now because it will help you in the future.
• If the opportunity is present in any of the scenarios, you could further the conversation by talking about the strategy of both saving some and spending some.

TIPS:

• Be sure to praise and reward the child for good decisions or acquired insight.
• End the activity by hugging them and praising them.

FOLLOW UP IDEAS:

• Play some on-line money games with your child.
• Help your child build or acquire a piggy bank for saving.
• Help your child set a goal to save money and talk to them about what household chores they can do to earn money toward that goal.