Have you ever thought of the best way to teach
kids how and why to save money, even a little?
There are so many lessons your children will learn from you, but few are as important as the value of saving money. They say that money doesn’t equate to happiness, but it can be difficult to find happiness when you’re sitting on top of a pile of debt.
And in reality, if your children don’t learn the value of saving money, they’re likely to end up at the top of that debt pile. If you’ve ever been there yourself, you realize it’s a terrible fate.
So without further ado, let’s cover a few ways you can teach children the value of saving money.
- Talk about wants and needs
When your kids are young, start with the basics. When your child asks for something, talk about whether they want or need that item. Wants are items you can do without. Needs are items you need to survive. Talk about how it’s okay to want something, but a want indicates a decision. Once you have identified that an item is a want, you must decide whether you’ll get it or save the money instead.
- Create money-making opportunities
Whether you pay your kids for household chores or other jobs around the house, give them an opportunity to make money for themselves. This will teach them what it’s like to work for money. Just be sure that the pay is appropriate for the job. Avoid overpaying your kids for small jobs, or they may not learn what it’s like to work for real money.
- Set savings goals
In order to get kids excited about saving, you have to make it fun. You can do this by setting savings goals and allowing them to watch their money grow. Task your kids with saving 25-percent of their allowance every week. If they get a $10 allowance, they’ll save at least $2.50 each week. It’s up to you whether you want to allow them to spend the extra $7.50. At the end of the year, your child will have $130 in the bank. Fifteen years later and your child may be entering college with nearly $2,000 that they can put in an emergency fund or towards buying a car.
- Open a bank account
If you want to prepare your child for adulthood, open a bank account and get him or her used to the idea of banking. This is where he or she will store money in the future, so it’s a good idea to get kids their own savings accounts. At the end of each month, sit together and look at statements.
- Put your child in the driver’s seat
When your child is old and mature enough, put him or her in the driver’s seat. Give your child control over their own finances – with some guidance. Before you get to this point, you’ll control your child’s finances, but you’ll share all the knowledge with your kids along the way. After you give your child control, schedule regular meetings to review and discuss what’s going on.
- Expect mistakes
We’ve all made mistakes when it comes to finances. So it would be silly to expect your kids to be perfect. Even if you’ve given them all the tools and knowledge, your kids will make mistakes. They’ll spend when they shouldn’t or not save enough. When this happens, don’t overreact. Simply review the mistake and talk about the consequences of making that mistake repeatedly.
There are ways to make saving money fun for your kids, but there will be times that it’s a struggle. Even though your kids may not always appreciate it in the moment, they will definitely thank you when they’re adults with healthy savings accounts.