Are you worried or asking yourself– “Should I save money for my child?”
Saving money is a habit that parents can teach their children at a young age.
The first step is to explain important concepts such as savings, a budget, and goals.
Giving children an allowance can teach them the value of money and—if chores are involved—it’s their first experience of hard work.
Younger children might keep their savings in a piggy bank, but older ones might want to keep their money in a real bank while working on their goals.
Children can learn the importance of living within their means, which is one of the basic tenets of saving.
In school, we aren’t really taught about the importance of saving and many of us find that as adults, we have to fend for ourselves.
But there are ways to empower the next generation, and that starts by teaching children the importance of saving from a young age.
If you are a parent, here are 5 tips on how kids can save money;
1. START WITH A PIGGY BANK
A piggy bank can be a great way to teach your kids the importance of saving while giving them an easy way to do it. Tell your kids that the goal is to fill up the piggy bank with dollars and coins until there is no room. Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow.
2. USE HOMEMADE “MY GOAL” SAVINGS JARS
When your kids really want the latest and on-trend toys or a new action figure, let them know they will have to save up for it. Give them a jar for each of their desired purchases and offer them a small allowance each week in a denomination that encourages savings. You can also encourage your kid to get more creative and put some art on the savings jar.
3. AVOID IMPULSE BUYS
Do you sometimes hear these words from your son or daughter? “Mum, I just found this cute dress. It’s perfect and I love it! Can we buy it please?” “Mum, I want the new toy car, can we buy it please?” Does this sound familiar? This age group really knows how to capitalize on impulse buy—especially when it uses someone else’s money.
4. GIVE COMMISSIONS, NOT ALLOWANCES.
Don’t just give your kids money for breathing. Pay them commissions based on chores they do around the house like taking out the trash, cleaning their room, or mowing the grass. This concept helps your kids understand that money is earned—it’s not just given to them.
5. LEAD BY EXAMPLE
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.
Reiterate the message that every time you get paid, you save a portion of your check to help prepare for the future.
Teach your kids about why and how you are saving. Also, stress the importance of giving and contentment.
Teaching kids to save their money is more of an art than a science.