We all know that saving money is not being taught in school at an early stage. Our home is the first school of every child. Saving money habits is not an easy thing to do that even adults are having a hard time to do it consistently.
As parents, it is your responsibility to teach your child to save money as early as possible. Nowadays that we are besieged with the temptation to spend here and there, saving money is important to be part of every child’s early education.
How does a child save money? Where do they get the money to be saved?
First, tell them the difference between wants and needs. That it is important to focus on their needs and work for their wants. They should know that wants must take the back seat to needs in terms of spending.
One way to start is to give them their allowance. Giving their allowance would make them realizes the importance of budgeting and the value of money. Having their own allowances would make them live within their means, which is one of the basic principles of saving.
Let your child earn their own money. Allowing them to earn on their own would give them the opportunity to learn how to use it wisely and save some. If you offer them a specific amount in exchange for household chores, they would also learn the value of their own hard work.
Help your child to set the goal for saving and avoid impulse buying. If you just tell your kid to save money, it is useless. There should be an explanation or reason for why they need to save money, what it is for? They will be motivated in doing so if they know their goal. Let them think of their short term goal like saving to buy a new toy, or to buy a gift for their loved ones. Buying on the spot of the things they just want is a big no. They should work hard to get it. If your child can’t wait for his or her savings to buy something, you can lend them some amount with the agreement of paying you back with interest. In that case, they would realize that it would cost them more to buy that something if they will not wait to reach their savings on the target goal.
Once they have set their goals, they must find a place to safe-keep their savings. As for many children, they put their money on a piggy bank or any other container that would make their money safe. They can also put a label outside and write the amount every time they added into it so they can track the progress for the specific goal. For teenagers, you can help them open up a savings account to keep their money and there, it will earn interests.
Children usually received money gifts for their birthday or any other occasion, that you can tell them to keep the big portions for savings and the rest for spending.
After teaching your child the habit of saving, let them learn also the habit of giving. They can give to the church or anyone they know that in need of help. In that way, they will see the impact of giving to the receiver and how grateful it will be to be a giver.
Teaching your children the importance of saving money would take time and very hard, but as they grow older and they know how to manage their own finances, you will realize that taking time now is all worth it.
Marie Fe Caparas