Yes, you heard it correctly. Teaching your daughter about savings will benefit both of you. She’ll learn life long principles and you’ll save more in your OWN retirement. #Intergenerationalwealth baby!
How do you get her started?
1. Start a savings account for her. Keep it simple and fee “free”. Talk to someone in your local savings bank. Check out credit unions. Try online banks. Or do a quick google search “Savings accounts for kids”.
2. Make a game of it. This is the trick. If you make it painful, she won’t play. But if you make a game of it, she’ll look for ways to win. How do you do that?
1. Match whatever money she saves from her allowance.
2. Give her money for chores – above and beyond the basics – and only put it in her savings account
3. When she receives money for gifts – give her additional money if she saves it – even if it’s only 20%.
4. Help her start a business and add the money to her savings account
5. Create a fun eye catching chart to demonstrate how much the savings grows.
Now you can get more advanced and teach her a ton about savings, investing, interest rates, the power of 72, etc.
And here are a few resources if you really want to dive in.
But whether you just keep it a “savings” game or decide to dive in deep, something interesting will start to happen in your own financial world. You’ll start saving more because you are focused on it.
How does that work? Well they say that what you focus on grows. So to help things grow, I recommend that you mirror one thing – and only one thing – that you are doing for your daughter…for yourself.
And why is that so important? Because everyone knows that your daughter never does what you say. She will do what you DO.
Use it to your advantage!
- If you have options for retirement at work, use them
- Open your retirement account and start having money deducted automatically pre-tax. If you have to start out at 1% or a minimal amount out of one paycheck. Before long, you’ll be increasing the amount and not feeling the difference in your paycheck.
- And I recommend you do this whether your company matches your contributions or not.
- If you don’t work at an employer with retirement benefits, start your IRA.
- Set up an automatic – yes, autotmatic – deduction.
- And REWARD yourself when you do it!!
- I don’t care if it means you save $20 and take a relaxing one hour bath. Just get started. Put the kids in front of the TV or internet (no judgment!) and get started.
The biggest lesson here is to get started and make it regular. Don’t worry about how small the amounts look. And don’t get too focused on how big the goal looks. Just get started.
So tell me what steps you are taking below!