Most of us save money for our own retirement, and only early enough for our own retirement. However, this applies to every child. Parents have an obligation to potentially save money for their kids’ future. Let’s use a small percentage of their allowance and let them be taught to be money savvy adults.

A small percentage of their allowance allows them to budget and save a little money for their future. Let them make their own lunch and take it out of the house. Let them pick out their own clothes and shoes. When they want something they can go out and buy it. Let them do whatever they need as long as they save their money for their future.

Of course, by letting them save their money on their own they may learn more about how to save money on a regular basis and how to spend it wisely than we did when raising them. In addition, they will have more of an understanding of how the money flows in their lives.

Taking small steps at a time will make a huge difference in their lives. We can start them off with saving five percent of their money from every pay check.

Let them invest their savings in mutual funds for their future. If their bank is just making the interest money, no matter how much your kids save by renting a CD at the local community bank they should get the interest. This is a great first step as long as you know what you’re doing and that the long term future rewards are phenomenal.

Okay. Time for the BIG payoff. Let your kids put their savings into their retirement accounts whether they are IRA, Roth IRA, SEP or any combination of these plans. Let them contribute at least a portion of their savings to their retirement accounts every paycheck. If they don’t save any money and just save their money on their paycheck because all their friends are spending it and they haven’t learned how to manage it yet, their future will not be as secure as it should be.

If they do save some money obviously they will have more and have a better chance to save up for something big. This is one step you should never take. You should want to put a plan in place now that just allows them to save a little bit every week or bi-weekly. This is how you teach your kids to save money now, instead of waiting until they are getting close to adulthood and are probably going to be in charge of every aspect of their finances.

Take some time from now to talk with them and talk to them about their finances and dreams for their future. Let them know that their results will determine whether or not they continue to save money. Let them see the value of the five percent for each paycheck that they put into their retirement accounts. Let them see how if they don’t save anything and plan on being a lot older and in charge of their finances because of their lack of understanding.

When you’re raising kids to be financially responsible, you are not raising people who don’t save money. If you’re managing your money properly, your kids will know how to handle their money, not only when they have a job but also in their early ages. So, when they’re little you can give them more of an allowance so that they can learn to be financially responsible.