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Teach Your Kids to Save: A Lesson in Math, a Lesson for Life
Whether your child is 5 or 15-years-old, it’s never too early (or late) to start saving. A multitude of math concepts tie in to the task of saving, and they range from simple to complex. For the beginning math student, there’s addition and subtraction. Percentages, math problems and other more complex math concepts can challenge the experienced math student. As your child’s math ability increases, you can present increasingly abstract aspects of savings to boost math skills even further.
What’s more, for children who need a good motivator before they’re willing to learn, saving offers a powerful, built-in incentive: financial gain. Once children make the connection between saving and accumulating money, they’re unlikely to lose interest. Whether they hold onto their gains or splurge on a sought-after toy…well, that’s another lesson altogether.
For now, try these savings-oriented lessons to get your child thinking like a mathematician:
Have your child work out a budget, dividing his or her savings into various “spending” categories. For instance, have your child allot a certain percentage for after-school snacks, entertainment, charity, family birthday presents and savings. (You can build in more or different categories, or have your child develop them). The tricky part? Making sure the various percentages add up to 100 percent.
Here’s an adaptation of the budget concept for younger children. Explain what a percentage is. Then, illustrate the concept of a percentage by drawing a big circle, or pie, and dividing the pie into percentages based on the various spending categories to which you both agree. Finally, have your child color each category a different color.
Tell your child how much a desired toy costs, then have him figure out how much money he will need to save in order to buy it (this may involve addition, multiplication or division, depending on what approach is used.) Take it a step further by asking him to figure out how many weeks’ worth of allowance it will take to save for a given toy.
Consider “matching” your child’s savings—either dollar for dollar, or by a given percentage. Then, ask your child to determine how much extra money he’ll earn if you match five percent of every dollar of his allowance for the next 12 months. For more practice with this math problem, change the percentage and number of months.
Add interest to your child’s “savings” account. Explain that banks offer a certain interest rate for savings accounts. Then, hash out with your child an agreed-upon interest rate and have him determine, on a monthly basis, how much additional money that interest earns him. (Keep track of the earned interest on a computer spreadsheet or in a notebook.)
Discuss the concept of borrowing, as if from a bank. For instance, your child may want to buy something but needs to borrow money from you in order to obtain it. Will you loan him the money interest-free? Will you charge interest? If so, how much? Will your child need to make monthly minimum payments on the loan?
When it comes to teaching kids how to save, there are no hard and fast rules. Take cues from your children—some will be more conservative and rigid in their ideas of saving and spending; others will want to take risks and try more creative ways to accumulate increased savings. Encourage your children to explore and find out what works for them.
To learn more about how Sylvan’s tutoring programs can meet your family's needs, please contact your local center by calling 1-800-228-3413 or use our Center Finder.
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