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Financial Literacy

Saving is Easier with a Goal

Saving means having patience – a key requirement for managing money successfully. Most Swiss children and youths voluntarily set aside part of their pocket money, but for what? Daniel Betschart of Pro Juventute explains in his column how a specific goal can give kids an incentive to save for the longer term.

Saving is easier when you have a clear goal in mind, as children and adults can agree. Parents can help their children find a saving goal appropriate for their age. If the goal seems worthwhile, they will be more likely to stick to it, and resist other temptations.

Talking about Wishes

When parents speak to their children about wishes, they might mention their own dreams. They can start with a game such as: "If you could wish for anything, what would it be?" as a way to find out what's on their kids' minds, and what their dreams are.

Discussions on resisting a purchase, and why we sometimes have to put wishes on the back burner, are important.

Daniel Betschart

It's fun to think about wishes. We must also think about whether these wishes can really be fulfilled – or what it would take to make them come true.
There are some wishes money can't buy, such as good friends and health. Wishes for superpowers will remain a fantasy, and most of us will never be able to afford a fairytale castle. It's important for kids to know that not all dreams come true, and sometimes even realistic wishes have to be set aside.

Find the Right Time Frame

Saving requires perseverance. That's why it's important to adjust the time span to the age of the child. As kids get older, the saving goals can be longer term.

  • For younger children, the time frame is just a few weeks and the goals are smaller. They might save for a comic book or small toy.
  • Primary school children can set medium-term saving goals. They can put aside money for several months to buy a bicycle, video game system, or football boots.
  • Long-term saving goals, such as for a car, are realistic only for teenagers and young adults. 

Children can also have multiple saving goals spanning different time frames. However, too many saving goals can be overwhelming for children and make reaching a single goal more difficult. Naturally, for older children looking to save a larger amount of money, a savings account is a good option.

Patience – A Prerequisite and Life Lesson

Saving means not spending your money right away, but setting it aside – to fulfill a wish later on, for instance. There is no instant gratification, because we have to wait until the saving goal can be met. Starting at around age four, children are able to forgo something for a short while if they can look forward to a greater reward later on. This is a very essential skill for managing money and many other areas of life. After all, throughout the years children will be confronted with situations time and again where their wishes don't immediately come true. It is important for children to understand why they have to do without certain things but can delight in others.

A column by Daniel Betschart