It is never too early to start saving. This applies to everyone; not just working adults. Raising children means that one day they will grow up and become adults with more needs than they have now. The world today revolves around money. When kids grow, they will start to fend for themselves, and you as a parent will not want to see your kids suffer or make poor financial decisions. This is why it is important to cultivate a savings culture in your children. This article will help you teach your kids the importance of saving.
- Have A Piggy Bank: This is the most common way kids save the money they make. Have each of your kids own individual piggy banks at home. Encourage them to always drop a few coins or notes at least every day. If it is not possible for them to drop coins on a daily basis, encourage them to make weekly deposits to their piggy banks. Dropping coins on a daily will lead them to saving a lot of money by the end of the year. Don’t allow them to open the piggy bank no matter the circumstance. Children may see the piggy bank almost full and think that they have saved enough. There is nothing like saving enough for children. Encourage them to keep depositing, and if the piggy bank gets full, get them a new one. Kids can be heedless and open the piggy banks at home. Ensure that your kids are disciplined enough to not think of opening the piggy banks in your absence. Train them to be true to their course of saving.
- Lead by Example: You want your kid to save every coin they earn but you are a spendthrift; nope, it doesn’t work that way. Be a role model to your children. Don’t just talk about the importance of saving, lead by example and save in your own kitty. Children often copy what their parents do. If you talk about saving but don’t do it yourself, then be sure that your kid will not taking the whole saving thing seriously. Have a home bank where you deposit your change and balances or open a savings account at your bank. This will go a long way in ensuring that your children save as they should.
- Set Targets: Set achievable targets and follow through them to the end. So your child was to save two bucks by the end of the week? Check up on them and ask how much they saved. If they saved less than the set goal, then talk with them on what should be improved. Setting goals is a good way of keeping the cycle going. There is no point of saving for a week, then forgetting about it until a month later. Good saving habits require that we save as often as we can. Setting weekly goals for your children will help them achieve the monthly goals, which will boost their annual savings. When setting goals, don’t ever reduce the amount. Keep increasing the monthly targets for your child especially when they make more money than usual.
- Only Give Allowances After Some Work is Done: Giving kids money only after they have done some work is a great way of teaching them to be responsible with finances. Adults get paid only after working. Infuse this sense of responsibility in your children as early as you can. Always remind them that there is nothing given for free in this world. That people have to work to earn their pay. With this information, your child will always be responsible with the money you give them as they know it takes some work to earn it. Your children don’t have to do tedious work to earn money from you. Basic house chores like vacuuming, washing the family car or pets are enough to make them earn a little allowance. Refrain from giving those allowances even when they have not done any work. When given free money, kids often think that it is easy for one to make easy money. Having them work will make them spend wisely.
- Keep Communicating: Continuous communication with your children will encourage them to save more, and see you as their financial counselor. Talk to them on a daily basis and assure them that they are doing the correct thing. When you see them deviating from the main course, keep them on track. Constant communication with your children will also make them open up on any difficulties they face.
- Talk to Them about Needs and Wants: A lot of times, kids can’t differentiate between needs and wants. It is your duty as a parent to explain such things to them. Make your child understand that not everything they want is necessary. Teach them to always prioritize basic requirements over luxury items. Make your children learn that not everything advertised in the media is a basic need. Some are just extras packaged well to mislead consumers. Once your children understand this, they will always try to save the extra buck for a rainy day.
- Open Real Bank Accounts: Piggy banks are good for children’s saving, but you know what is better? Real bank accounts for children’s savings. Piggy banks work well with children under 14.Your fifteen year old is too grown for just a home piggy bank. Not only is the money at the bank safer, they also able to view their progress from day one. Every record at the bank is digitized and your child can view their growth any time they want. Savings accounts for children will also make them feel a little grown, and this will have a positive impact on their attitude toward the saving culture.
By helping your child start saving early, you are not only instilling good financial habits, but also helping them in their future life. There’s nothing as good a growing up while understanding good financial habits, A child who started saving while in kindergarten will most definitely know how to plan well financially in their adult life compared to one who was never introduced to the saving culture when young. Remember, help your kid to start small, and don’t allow them to be distracted along the way. Keep asking how their saving experience is, as you will know where their heart lies from the answers they give.