Teaching Your Child To Save Money
Parents have to bear the challenges of bringing up their children. Teaching them values that can help serve them for life. One such problem is being able to teach your kids the importance of money and encouraging them to save money.
In this article, I am going to be talking about the ways you can encourage your child to save money from a very early age.
Talk To Your Kids Openly
It is incredibly essential to have an open communication platform with your kids at home. If you’re a parent that is struggling to make the finances you have last, then you should talk to your kids about it. Communicate your problems and concerns so that your kids are considerate about your condition.
Even if you’re financially sound, teaching your child the importance and value of money is incredibly important. Opening up financial conversations at a very early age is a massive positive. It will help encourage your kids to talk about their finances openly with you in the years to come. Meaning, your children will naturally be more confident in asking you for financial advice.
Give Them A Piggy Bank
Piggy banks are old school, but they are still the most ingenious ways to help encourage your child to save money. If you have a small child that is still learning the concepts of money, you could get them a piggy bank. This plants the seed to encourage where and how they need store all their money.
Explain to your child the concept of saving money. Also, why saving up each day is essential as it helps you to be able to afford the things you want. If you haven’t given your child a budget, then you could start with that. Giving your child a budget to operate with and letting them know that this is the only money they’re going to get each week, will help them be more careful about their spending.
Teach your child at an early age about the difference between wants and needs. He or she can then differentiate between the things that are important or not. This lesson will overall help them make better judgments on their spending.
You could offer your kids incentives that could encourage them to save more. Say if you make a deal with your kids that for every 100 dollars they keep, you will gift them a toy. This incentive will encourage your kids to save up on their allowance.
You could also give them various incentives that would help them save money quicker. Most households pay their kids for doing some chores around the house. Giving your children an allowance for doing some basic tasks around the house will help them learn the importance of effort and hard work. It will also help them view saving as an ongoing target, it gives them structure.
Open A Bank Account For Them
If your kids are approaching their teens, then you might want to open a savings account for them. Many banks offer savings accounts for young savers. This can give your child an early sense of adulthood. You can check and track their savings and also teach them how to budget their money so that they can afford all the things that they want.
Another way to teach your child how to budget is by helping them make a monthly spending log. It helps them realise how much they are spending unnecessarily and shows how much they can save. Underlining a weekly budget with them can be a real eye-opening experience in order to manage necessities.
Encourage your child to keep an eye on his/her spending. Help them figure out that it would be much easier to reach their target goal if they saved. It’s also very well known to let your child make their own mistakes. It may be tempting to step in and control your child’s expenses yourself, but a lesson failed is a lesson learnt.
In any case, letting your child make mistakes now is better than them making worse ones later on in their lives. Your kids will also learn this at a younger age, and all this learning will reside with them. It’s all part of the journey to help them make financially sound decisions.
Set A Good Example
Children learn from their elders. You might not realise it, but your child looks up to you for inspiration most of their early years. Every year in a child’s life are crucial in determining their personality, your upbringing has a significant hand to play. It’s the parent’s responsibility to give their child the best and the most realistic childhood possible. You want to know they’re as well suited to the real world as they can be.
You can teach your children the importance of saving by your example. Make discussions about money the norm around the house, so that your kids can gain valuable insights at a very early age. Merely putting your kids into school is not enough because most schools offer little to no practical advice on how the real world operates.
Often, we see that our actions have a much higher impact than our words. You can teach your children the importance of saving by setting the example.
Advise them about instances where you didn’t get something because it only gave you short term value and not long term value. For example, if you’ve had payday loans that you need to pay off, focus on paying it off, and let your kids know your efforts. Try paying all your bills on time to avoid unnecessary surcharges.
Make It Fun
Set up a family pool of funds which all the family can refer to whenever they need some money. Hold juries at home that can help your kids decide whether the amount that needs to be spent is worth spending or not.
Holding a courtroom jury at home is a fun way through which you can teach your kids objectively about the difference between wants and needs and enable them to be better decision-makers in the future.