It’s important to teach your kids to save money for later use especially when they are of a certain age, say 7 years old. Saving money can be a challenge for your kids. However, it’s a best practice to train them to be focused, disciplined, and dedicated to their savings schedule. Without discipline, a child may not save according to their schedule. They may even break their savings for things they can do without.
Saving is an important habit that should be established as early as when your kids start earning commissions for their home chores. Teaching your kids to save money will assist them to be on guard against impulse buying. They will also develop a strong control over their financial life leading to successful lives in the future.
The following are the tips you need to teach your kids to save money:
1. Be an example for your kids to save money
Although saving money can turn out to be a challenge for you too, as an adult, you have to set a good example for your kids. You may, of course, have a personal savings account, but it’s important to give your kids a clear example of saving money in a piggy bank visible at home too. One of the best ways to do this is by creating a systematic approach to your everyday spending so as to save the little you get each day. Avoid debts and arguments on money issues with your partner in front of your kids. Have a positive attitude towards money and saving.
2. Use a clear savings piggy bank for your kids to save money
One way of motivating your kids to save money is by using a clear savings jar which gives them a clear vision of their money growing. This may result in a positive competition among your kids to save money as they try to outgrow one another. As they get older, you may want to introduce them to their own bank savings accounts; where they also get an opportunity to earn interest.
3. Give your kids commissions and allowances
Encourage your kids to save money by giving them commissions and allowances based on the chores they do around the house. Don’t just give them money without them earning it since they will quickly spend money easily gained. Giving your kids commissions and allowances will teach them the value of hard work and money. With these commissions, you will be able to tell which kid is disciplined to save and which one isn’t and do a positive follow-up on them.
4. Teach your kids about budget and saving goals
Teach them how to budget for the things they need on a monthly basis and also help them set their own financial goals. Being kids, they may not know the reason they are saving money. As a parent, you can assist them to define their saving goals and also show them how to plan for that goal based on their savings rate.
5. Teach them that patience pays and contentment is a virtue
As they save their money, they may fall into the temptation that their money is not growing as fast as they wish. This can be as a result of comparing what they save with their friend’s “swelling” piggy bank. It’s important to stress the need for patience and contentment at an early age.
6. Teach your kids to buy less and track their spending
Impulse buying will also occur to kids. They may want to buy what they see in advertisements or with their friends. It is important to teach your kids about the need to have self-control over what they need and want. They can save their money and buy something better in the future; or if they need to buy, teach them how to compare prices and quality. Teach your kids to question themselves if they really need to spend their savings on a movie ticket, a bicycle, or another latest smartphone. Teach them to wait and buy something of much better quality.
7. Teach your kids to save money and also to give
As they save, it is important to teach them that giving is also an important part of their life. They should, however, give to their capacity and not drain their savings.
As you teach your kids to save money, it is crucial that you leave them room for mistakes. These mistakes will also sharpen their understanding of the value of saving and self-control. Don’t be quick to step in and correct a mistake that may cost them their saving, rather let that mistake teach them. Saving money for kids is important for their financial health as they will grow up knowing the issues that surround money and will plan wisely.