Teaching our children about money is an important parental responsibility.
Early lessons will have great impact on their lifetime financial habits. Here is a fun plan to help teach your kids about the value of saving. It can be used with kids from about age six and up, although creative parents have modified the plan to work with younger children as well. Follow these steps:

1. Identify the stuff of their dreams.
Take the time to find out what special things your child would love to have. A new bike? Roller blades? A special toy? Pick an item you both feel is worthy of "the plan".

2. Offer to match funds.
Acknowledge your child's desire. Talk about the object of the plan and stir up excitement. Announce that you will be willing to pay half of the cost to obtain the coveted prize (or other portion you think is fair and reasonable). Be careful about what object you choose. The goal should take about four to twelve months to reach, depending on the child's age (older kids have the patience to wait longer). Let your child know that this is something you'll be working towards together.

3. Create an earning plan.
Brainstorm together the ways your child can earn money. Help set a goal to save a portion of her allowance (discourage her from committing the whole thing to prevent future negative feelings). Help create ideas for earning money: car washing? a paper route? dog walking? You can even offer your own list of chores for pay. If you do, make sure they aren't regular household chores, and that they are real necessary tasks: washing the car, cleaning the garage, etc. (This plan also teaches a healthy work ethic!)

4. Create visual boosters.
Time to get out the construction paper and markers! Design a chart or "thermometer" that shows spaces for every dollar earned. Your child can color each step of the goal, or place stickers in the squares. Cut out pictures of the goal item from catalogs or ads and glue them on the poster. This visual aid makes the process more fun, gives your child a visual "reward" for each dollar earned, and keeps the Super Saver Plan fresh in her mind.

5. Take it to the bank!
Mini-goals along the way will keep your child motivated. The first mini-goal could be a trip to the bank to open a savings account. Call around to find a bank that offers a special child's savings account that includes rewards and incentives. After you have opened the account you can make special outings to the bank at certain intervals. You may even want to plan a "Half-Way Party" or some other prize at the half way point, if the goal is a big one.

6. The big day!
When your child has reached her financial goal take her to the bank to withdraw the money. Ask for it in large bills - they are more impressive! Make your shopping trip an event and follow it up with a special meal or trip to the ice cream shop. This IS a time to celebrate! Your child will feel the thrill of achieving a savings goal for a much desired item, and this will encourage her to set another goal. My eight year-old daughter, Angela, earned a bunk bed using this plan, and I discovered an added bonus items that your child has worked and saved for are usually treated with respect and care - her bed is her treasure! So, this is an opportunity to teach responsibility and pride of ownership, too!

© 2000National Parent Information Network

Credits: Elizabeth Pantley, author of Kid Cooperation and Perfect Parenting