Here are some Easy Tips To Teach Kids To Save Money. Helping your kids Building fiscal responsibility early is a great life skill your children need!
Six Ways To Teach Your Kids About Saving Money
As a parent, teaching your child tips to save money to manage and properly save is a skill that will deeply affect their ability to live as a productive, self-sufficient young adult. It can also be one of the more challenging tasks you face. Kids’ impulsive nature makes them want to spend every dollar they earn.
I find kids are clued in on what they want. And do not seem the slightest bit concerned that it will involve a monetary cost! I love though how they want what they want and they are confident about it. What I find even more amusing is that they have no problem spending our money. However when you ask them to dig into their savings and I am met with highly indignant faces!
So let’s teach them early about saving and spending money. As you know, responsible spending and saving habits are among those that carry over for the rest of your child’s life. So it goes without saying teaching them early is one of the greatest gifts you can give your child.
Here are some examples of ways you can teach kids about money.
Help Them Earn
It’s hard for your child to save money if he has no income. Encourage him to save money that he receives as a birthday or holiday gift. In order for him to learn more tips to save money, he needs to have a reliable method of earning it in the first place.
Setting up a system: When they are paid in exchange for chores, or providing him with the opportunity to make money. This allows them to understand that money doesn’t just go on trees. Everyone has to work for it. Keep in mind there are also a variety of ways that you can help him earn his own money.
Finding the best system to suit the unique dynamic of your family may require a bit of creative thinking. It’s is better for them to teach them that money must be earned instead of being something that he’s simply awarded for.
Think about giving them a jobs list at home and allocate different monetary values for different tasks. Be sure to have a value of zero for some tasks which they need to do as part of the normal contribution to the household.
Match Their Savings
Encouraging kids to save their money rather than spend it isn’t always easy. Unless your child’s personality is one that has a natural affinity for saving, he’ll probably want to rush out and make purchases with every dollar that he earns. Establishing a system of matching the money that he saves can act as an incentive, especially if it’s paired with a contingency fee for early spending. Think of it as the kids’ version of an interest-bearing certificate of deposit!
Let Them See That Their Money Is Growing
Kids may not care much for columns and rows of numbers. But they will begin to understand the importance of keeping track of their money. Giving them their own tracker will encourage them to save if they can see their money grow.
Keeping a transparent jar for kids to fill with money as they save it provides a visual incentive, and he can watch his efforts literally pay off. When the jar fills, depositing the money into his very own savings account can strip away the temptation to make frivolous purchases with all the cash he’s accrued.
A fun piggy bank for your kids can be a great way to encourage savings. To encourage saving up for their short-term goals, put a picture of their desired toy or item on the jar. This allows them to have a visual reminder of what they are working towards.
One of the best tips to save money to teach your kids is to set goals.
Rather than making big purchases for your kids, encourage them to save up to make those purchases themselves. Gifting an expensive video game console or an electronic gadget for holidays or birthdays might earn his excitement and effusive praise. But encouraging him to set a savings goal and helping him to reach it will help instill a sense of accomplishment and pride in his ability to provide for his own needs. This also helps pass along with a lesson and concept of saving.
Keep Your Own Piggy Bank
Maintaining your own saving habits in a way that’s visible to your child helps them to understand budgeting. It is also important to explain what you’re doing and why. This is the most effective ways of passing along the skill of saving money. Kids aren’t known for always doing what their parents say. But when they observe their parents’ lives, they tend to mimic the behavior they see. Modeling strong savings habits and limiting impulse purchases will not only help you to save money in the long run, but also encourage those values in your child.
Let Them Make Mistakes
Though it may be your natural instinct to do whatever, you can to protect your child from disappointment. It is much easier to allow them to make a mistake under your care at an early age than to see them make mistakes when they are older. Early mistakes are the best lessons learned. (AMEN!)
Allowing your child to spend money he was saving for a specific goal unwisely will disappoint him when he realizes the setback. However, they will learn the natural consequences of overspending. In the future, they may learn to resist the temptation. I specifically tell my kids to wait a week before buying a temptation. This gives them time to really think about their spending. Many times, it passes and they choose to save for something else.
Remember that the process of teaching your child financial responsibility and the importance of saving is just that: a process. These tips to save money may take years for them to understand, but it will be well worth the effort for both of you. Baby Steps are better than no steps at all.