Teach your child savings habit

The importance of setting aside savings from regular income cannot be over-emphasised, whether as a business, or an individual. Having a savings culture helps to prepare individuals and business entities against unforeseen circumstances or financial obligations, but beyond that, they make it easier to take advantage of various investment opportunities that may emerge.

As a parent, it is important you instill the culture of savings in your ward from a very early age. The financial orientation that children receive from their guardians often set the foundation for the monetary habits they sustain throughout their lifetime. Here are some ways you can help to teach your child inculcate a savings habit.

Hold conversations with your child on financial literacy. Start to enlighten your child on why it is important that they set aside some of their income, which may include pocket money, gifts from relatives, monetary prizes won, and more. Share personal experiences with them, and help them see from their own lens the numerous benefits they stand to gain from having the culture of savings. Be there to always offer guidance when they attempt to make unnecessary expenses, and help them ideally separate their needs from their wants.

Reward your ward with incentives for meeting saving targets. Sit down with your child and help them set targets for their savings, and for each time they meet a savings goal over an agreed period of time – weekly, monthly, or over any selected time frame, reward them with some interest, or with a prize that they would love. It would increase their desire to always set aside some of their earnings. It is important to always set realistic targets that would not necessarily strain them, but only serve as a test of their level of financial discipline.

Kids learn a great deal from their guardians throughout their childhood. As a parent you can take advantage of this by leading by example. Show your ward how necessities take precedence over wants. Avoid unnecessary expenditure, as children pay a lot of attention to the things that they see. Discuss the importance of budgeting and proper financial planning, and show how you make the most of your regular income, while setting aside a portion of it as savings.

Set up a savings account for your child. For a number of children, saving on their own might be an issue, as the urge to break the bank and deplete their savings will come up every now and then. To counteract this, help your child set up a kiddies account at a trusted bank, that will allow then completely put away their savings, and ensure that their progress is regularly monitored. It will also help them accumulate interest from the bank over the length of the saving period.

Finally, help your ward to grow their savings, by regularly giving them tips and monetary rewards for completing tasks, getting good grades, winning curricular and extra-curricular prizes at school. Give them the option to save a portion of these rewards with you, and always stay completely accountable to them.

Photo credit: https://kenyanwallstreet.com/