25 June 2022
How to encourage children to save for their future
We all know trying to convince a child to save their pocket money when they’ve already got it spent in their minds on sweets and toys can be an incredibly difficult task however instilling strong money management skills from an early age is one of the most important lessons they can learn and they will thank you for it when they’re older.
Why not open up a PCU minor account for your child to save their money in a safe place. For more information- Click here.
Each child who opens an account will receive their own PCU piggy bank* to store their funds until their next lodgement and a PCU savings book which clearly outlines how much money they have.
Portadown have created a list of tips to encourage your little one to save for their future adventures.
Talk to your child about the various expenses later in life such as a car, rent, further education, mortgage etc. and outline how saving a little (or a lot) throughout their childhood will really help them when they’re an adult and actually need the money.
Sit down and set out a percentage that the child would like to save for each week or month. This could start of as 75% spend/25% save to slowly adapt them into the world of saving and gradually increase the saving percentage as the months go on. Starting too high with the saving percentage could put the child off.
Give pocket money or allowances in small denominations and encourage them to put a little aside (e.g. use coins not notes). Giving them a transparent piggy bank or jar so they can watch their money physically increase, is also a good idea which is why we give our PCU piggy banks to all new minor accounts. Then once its filled, bring it to our office and lodge into their minor account and start again.
Positive reinforcement is very important; consider rewarding children for regular saving. Don’t focus on the amount saved, but the fact that they are developing a savings habit. Praising and rewarding them when they save even very small amounts on a regular basis will help to imbed the habit. A reward doesn’t have to be anything fancy, it can be a free day out to their favourite park or their favourite meal.
Consider linking pocket money and allowances to chores or responsibilities in the home. This helps to embed the idea that money must be earned. The more effort required to earn their money, the less likely they will be to spend on impulse or all at once.
Dissuade young people from spending their savings on impulse. Remind them of their savings goal and what they originally wanted to save for. Share with them a story of something that you would have saved for when you were younger and the benefits of having more money when you’re older.
If the child puts up resistance for saving of their own accord, “tax” their allowance every week/month and put that money into their savings yourself. That way the money received by the child will be all theirs and when they start working later in life they will already understand that money will be taxed.
If you are a parent/guardian, you can open a minor saving account for a child, if they’re under the age of 16.
To open an account, you will need:
The child’s birth certificate
Photographic ID of the individual opening the account
Proof of address (Current utility bill, bank statement, government issued documentation relating to tax or benefits (within 3 months))
Minor accounts can only be open in office (26 Market Street) and they will mature into adult accounts when the child reaches the age of 16. At this time, the 16 year old will have sole access to the account and the money held in it.
*Subject to availability at the time.