Today’s fantastic family finance article is:
How do you get your kids to think about saving when they are spending?
Try a savings tax.
Anytime your kids make a purchase, have them kick in a little savings to a savings jar, account, or card.
How much? Here are 3 options to consider:
- Save the change: Round the purchase up to the nearest dollar. Save the difference. For example, $4.20 rounds up to $5.00. The difference — 80 cents — goes to savings.
- Match the sales tax: Look for the sales tax line on the receipt. The tax amount goes to savings.
- Save a percentage: Agree on a savings tax rate. Multiply the rate by the purchase amount. The result goes to savings. For example, a savings tax of 10% on $4.20 would be 42 cents.
You might even be able to find a banking app that does all that automatically, or at least makes the tiny transfers simple.
A savings tax on your kid’s purchases means more mindful spending and more consistent saving all bundled together. That’s a personal finance two-fer!
Get tomorrow’s tip here.