Tips for Teaching Your Kids How to Save
Teach Your Kids How to Save
Part of being a parent is teaching your little one lessons that will stand them in good stead for their adult lives, with the lesson of saving being of particular importance from a young age. According to Forbes.com, children as young as three years old can grasp financial concepts like saving and spending, and their money habits are already formed by the time they’re seven. Set your child up for financial success in the future by following any of these tips when teaching them how to save.
1. Talk with them
Simply having a conservation about money with your child is a great place to start. Money can sometimes be a taboo topic, one meant only for the adults in the home, but it actually represents an opportunity to teach children important concepts like working to earn an income and how this income contributes to covering household expenses. When the communication lines are open, it’s also a good idea to discuss the differences between needs and wants, so they can learn to differentiate between truly needing something like food and water versus simply wanting something like that shiny new toy.
2. Play a game
Playing a game like Monopoly is a great way to let your child learn more about money, and they’ll be so busy having fun they won’t even know its lesson time! With Monopoly especially, they’ll learn to grasp the concept of having a budget and saving their earnings till they’re ready to purchase something that gives a good return on investment. In addition, they’ll also learn about dealing with financial setbacks or shortcomings. Another tip is to look up kid-friendly educational apps or TV programs.
3. Help them to set goals
Once they understand the basics, help them to set their own savings goals. Maybe they have their eyes set on a new pair of shoes or the latest video game. Whatever they have in mind, chances are they’re more likely to achieve it if they have a clear goal to work towards and especially if that goal is written down. When goal setting, try to keep it realistic and within a reasonable time frame. If it’s going to take them ages to save up enough money, there’s a good chance they’ll grow increasingly impatient or lose interest along the way.
4. Set up savings jars
We especially love the idea shared by Forbes.com, which entails creating three separate jars – each labelled for “Saving,” “Spending” or “Sharing”. The idea is that every time your child receives money, they would divide it equally among the three jars. The spending jar can be used for small, impulse purchases like sweeties or small toys; the sharing jar can be used for helping out someone in need; and the savings jar can be used for the bigger, more expensive purchases. Another tip is to stick a picture of what they’re saving for on the jar, helping them to stay motivated and focused on the end reward.
5. Give rewards
To encourage your child to continue saving, it may help to create a visual timeline of their savings with rewards being given once they reach certain milestones, like the halfway mark. Similarly, you may also offer an incentive such as matching every Rand they save or giving a bonus amount once they’ve reached their goal. This shows them that it pays to put in the effort and helps them to appreciate the value of money.
6. Let them make mistakes
Sometimes the lesson is in them making a mistake. While you can guide them, they should ultimately be free to spend their savings where, and when, they want to - even if it isn’t a wise choice. Make room for mistakes so they can know and do better next time. After all,
Do you encourage your kids to save? What are some of the ways you do so? We’d love to hear your ideas via any one of our social media pages on Facebook, Twitter or Instagram.
