Teaching your kids to save money is an important part of responsible parenting. Many people graduate from high school and college with no concept of how to save money, make investments, or manage their taxes. Although teaching your child about bank loans, investments, debit and credit cards may seem like a little too much, you can start off by teaching them the simple art of saving money.
One might ask what is the right age for children to learn about saving? There are people who say that parents should start teaching their kids about the importance of money as early as age two. Some say that parents should let children be children and not worry about real-life matters, such as finances.
While the appropriate age for your child to learn about money may vary, imparting financial knowledge to them is highly important.
You can teach your children to save money at almost any age by utilizing the following techniques:
1. No Spoiling
Be careful about spoiling your children with toys and gifts and caving to their every demand. They must realize the importance of money and savings; if you give in to their every whim and wish, it will only spoil them. Many parents require their children to earn rewards instead of getting things for free. If they have to earn something, they are more likely to appreciate its value.
2. Use Jars to Save
A fun way to help your children save money is to use piggy banks or jars. They can also use envelopes to save the money and draw pictures on the outside of all the things they wish to spend the money on. Using clear jars will give them a visual of the money piling up, which might excite the child. They can use jars of varying sizes to save money for each item they want to purchase.
3. Set an Example Through Actions
Your kids learn from you. If they see you doing something, the likelihood they will also do it is high. So the best way to teach your kid about savings is by example. If the kids see you purchasing excessively, your child might think that this is a normal part of life. You must avoid spending on useless things in front of your child.
4. Start a Bank Account for Them
Once your children are mature enough, you can open a bank account for them. It will not only teach them to be responsible, but it will also teach them about the importance of savings. Opening a savings account may also teach them about interest, investments, etc.
5. Tell Them About the Dangers of Credit Cards
It’s important to teach your kids about loans and debt. Every bank wants to promote its different products and offers, and that includes credit cards. Be sure that they know the dangers of a credit card before getting one. If you’ve taught your children about the dangers of debt, then your children will know what they are getting into.
6. Instead of Allowance, Give Them a Commission
Instead of just giving your children a monthly allowance, you could pay them a commission in return for doing chores and household work. This will teach them that money is not just given to them because they demand it, but rather it is earned. Money in return for mowing the lawn, doing the dishes, cleaning their room, doing the laundry, and other chores, will teach them that nothing comes free, and you must work hard to earn money.
7. Talk to Them
The best way to get the message about saving money across is by talking to your children. Nothing works better than telling children up front about the advantages and disadvantages of savings. Teach them what they can do with their savings, how it’s beneficial to start as early as possible, why you should invest your money and much more. If you help them understand the importance of money, they will start taking responsibility for it from an early stage in their lives.
Teaching your children about saving money is not only important, but also prepares them for the financial responsibility they will have in the future. If your children learn to save money and keep their spending in check, they are more likely to have a secure future.