One way is to help them learn how to save their money. That's why the theme this year's CU Youth Month is “The Science of Saving,” to inspire children to save the money they earn so they can reach their dreams of a happy future.
Saving your money isn’t always easy, especially when you don’t have a lot to spare. After paying all your usual expenses, there may be very little “fun” money at the end of the month. When we do find ourselves with some extra cash, like a tax refund, many of us rush out to buy those shoes or that electronic gadget we’ve been eying for months instead of putting it into our savings.
Why do we do that? Why do we spend the money we planned on using for our future?
We can blame it on our brains. Behavioral science has shown that humans are hard-wired to act on impulse and that it takes conscious thought to delay gratification. It’s also much easier to focus on the present than our future.
To help you save for your future, behavioral science suggests visualizing yourself as you might look when you’re older. For instance, if you want to save for retirement, imagine yourself at age 67, living comfortably, maybe travelling the country, or having the time and the means to do something you’ve always wanted to do.
According to a study done in 2014, this technique works. Researchers took photos of 50 college students and digitally altered each person’s photo to make them look 70 years old. After seeing a photo of themselves at 70 years old, the majority allocated more of the money to their retirement fund than to the other options.
Another way to help you save for your future is by making it a habit. Start with small goals. For instance, commit to putting a certain amount, say $10, into a savings account every week. You can even set up an automatic transfer or payroll deposit into your savings account every paycheck. Over time, you can gradually increase the amount by a dollar or two.
To help your children get into the savings habit, start by having them cut out pictures of something they’d like to have someday and put the pictures where they’ll see them often. Then help them open a savings account here at RVCCU. Encourage your child to make small deposits on a regular schedule. If they keep this routine going, they’ll quickly see their savings grow.