Are we rich? Kids often ask this question. This innocent question can be answered in a way that emphasizes family values such as smart savings and responsible spending. Money does not have to be scary or a taboo.
Naturally, kids wants to buy stuffs – toys, video games, nice cloths, back packs, shoes etc. Nothing wrong in buying stuffs for children.
Buying things whenever they ask will make them feel “I get whatever I want because my parents have money”. Before this attitude goes out of control, teach your child how to save money for the things they want you to buy. This will make them understand the value of money and hard work.
It is important to educate your kids how to save money. Good habits start from an early age. Teaching your children how to save is an important step to prepare them for financial responsibility and a secure future.
How to teach kids to save money? Here are tips:
1. Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. This helps child to focus on saving each penny.
2. 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.
3. Consider rewarding your child for saving his or her money – Give a target and tell your child that if she saves certain amount in a period of time, she will be rewarded with a gift. Something like when you open an account in bank or credit union you get T-shirt, bag or something interesting.
4. One of the best things you can do is let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar.
5. A “savings match” can be a great way to encourage your child to save extra money
6. Have your child write out a wish list of things he or she wants to spend money on and prioritize that list. Prioritizing helps them to stop buying unnecessary things.
7. Let Your Child Make Mistakes – Allow mistakes. Observe mistakes he makes- then ask him what mistakes he made. This will help to be careful during investments and buying stuffs. Sometimes the best lesson comes from a poor decision, especially when your child is young and the financial loss will not be so great.
8. Play Games – To teach financial concepts play some games.
9. There are a number of games available to teach financial concepts to children. Monopoly and The Game of Life, for example, can teach money management skills as well as the importance of planning ahead.
10. While you don’t want to discuss about your salary in front of your children, definitely talk about your financial plan and how much money needs for a retired life. When you discuss about these important factors, kids will learn to save more.
11. Buy a attractive piggy bank. Use different types of envelops or jars to put money. Encourage your child to open a bank account and deposit money in the account.
12. Teach them to compare the quality and quantity of things – grocery, tools, and appliances. Tell them to do some comparative studies from various stores before buying things. When you are out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.
Using above-mentioned tips, you can make your child’s understanding of money fun and accessible. It is an investment in knowledge which truly pays the best interest in the future.
Author: Sumana Rao | Posted on: September 22, 2021