Tips on how to teach your kids to save this summer
Teaching your children how to save is an important step in preparing them for financial responsibility and a secure future. According to a survey done by Forbes, 74% of parents are seemingly reluctant or negligent about talking to their kids about money matters, 32% have lied to their kids about money and 28% have taken money out of their kid’s piggy bank.
Whether we like it or not, our kids will most likely take after us and emulate the money habits we exhibit.
Saving money is one of the most important aspects of building wealth and having a secure financial foundation. Yet many of us have learned the importance of saving money through trial and error, and more importantly, experience.
In school, we aren’t really taught about the importance of saving and many of us find that as adults, we have to fend for ourselves.
But there are ways to empower the next generation, and that starts by teaching children the importance of saving from a young age. If you are a parent, here are 8 ways to teach your children about saving money.
1. START THE CONVERSATION:- One of the most important ways to teach your kids about saving is to start a conversation about money and the importance of saving. Money doesn’t have to be scary or a taboo. Make sure that you are having continuous conversations with your kids about money.
They probably see you spending money, but do they understand it? Do they know how you make that money or if you have any more stored up for later.
Ask them about what they want to save up for. Ask them what they want their future to look like. Asking good questions can get them to think long-term and have a positive relationship with money. Letting them know you’re always open to have a conversation about money can encourage them to ask questions of their own in order to keep learning. This conversation has to be on going because studies have shown that 1 hour of conversation wears out in a child’s mind after 5 months, 18 hours of conversation lasts only 18 months and 24 hours of conversation is forgotten after 20 months.
2. SET A GOAL:- It all starts with a savings goal. Saving can be tough, but by helping your child see a reward at the end, you can encourage your child to work hard and follow through.
Having a savings goal or target helps make sure savings isn’t an open-ended concept to your child. The first saving goal set for your child should be reachable, fun and defined by both you and your child. Sure, it may seem silly to save for a small toy, but the sense of achievement is worth it.
You can make the goal more real for your child by cutting out a picture of the item they would like to save up for along with its price. Stick it on the wall in their room or somewhere where they will see it often. This will help greatly in motivating them towards their goal.
3. MAKE A CHART:- Once you know what your child wants to save up for, figure out how many weeks it will take to save that amount and make a chart to put on the wall. You can represent each week with a box and have your child put a sticker in that box or tick the box each time they put money away towards the savings. This will help them see how much closer they are to actually getting it.
4. MAKE IT FUN with a cute bank! :- Give your kids a cute way to save and they’ll be excited to see it fill up! All you’ll need to do for this is get a jar-any type or any size-and print cute labels for it and you’ll have a fun bank.
Remember to put the jar of money in a place where your child won’t be tempted to take it out and spend it. You may actually have to help them hide it if they are the type to get tempted easily. Be sure not to hide it in a place that is too difficult to reach so that they don’t forget about saving or even where the money is entirely. A sibling or parent’s closet may be a good place to keep it.
5. INCLUDE INTEREST PAYMENTS:- Just like a bank, provide your child with interest payments on every money they save in their money jar to help them understand that by setting money aside and keeping it there, they can make more money just as it is if they saved it in a real bank.
Making these interest payments monthly provides an incentive to ride out the month and delay gratification.
For interest payment, some parents double their kids’ savings at the end of the month while some provide as low as 10% – a number that provides just enough incentive without being too much.
6. SET A GOOD EXAMPLE:- One of the best things you can do is let your child see that you save money too. Put money in a jar or piggy bank while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is “normal.” Plus, since most young children want to be like their parents, seeing you do it will provide them with money lessons that further inspire them to save.
Also, when you’re out shopping, show your child how you compare prices of items before making a decision to settle for the item you finally get to choose. You should explain why buying one item makes better sense than another because it helps you spend less thereby saving more money.
7. PLAY MONEY GAMES:- Monopoly is such a popular board game, yet it seems to get overlooked as a good financial teaching tool. It is great for teaching kids that they need to save the money that they earn (or money they are given) because they might need it down the road for something they need or want.
It also teaches them how a smart, possibly expensive, investment can pay off in the long run if done correctly. There are also many more mobile and online games you can use to teach them savings.
8. TEACH THEM TO WAIT:- When your kids want to buy something with their money, make them wait a week (or two) before taking them shopping. The urge may come and go, helping teach impulse control. If they still want to buy the thing after this “cool down” period, chances are they really do value it, if they don’t, they money gets to be saved.
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