Children as young as 4, can begin to understand how money works, including how essential it is to save. And, by the age of 8, most kids form their basic money habits. If your children are spenders or unaware of the importance of money, teaching them about the proper use of money is not that challenging.
It’s all about teaching your kids the basics and continuing to encourage financially prudent decisions every day. Here are some steps that can help you achieve these goals.
- Set an Example
As parents, you should have a savings account and pay your bills on time to set a good example for your kids. When your child asks questions about the bills or why you go to work, share the importance of these things. Open the conversation about money whenever necessary. Some topics that you can discuss with your children include:
- The significance of saving
- How to save money
- How to make an informed decision when buying something
- Importance to give to those in need
- How to make money
- Open a Piggy Bank
For young kids, it is essential to create a visual way of saving money. Such as using a piggy bank. You can divide it into three jars – one for savings, one for spending, and one for charity. When you give your child money or if they receive it from someone, help them separate those funds into each piggy bank. Motivate them to save for a specific item, so they know the value of money.
- Provide an Allowance
Don’t provide your kids with an allowance just for the sake of spending. Instead, set up allowance-based specific tasks. Choose age-appropriate tasks or chores for your child to complete each day. At the end of the day or week, give them the money they deserved for performing those activities. It is crucial to keep their savings visuals so they can learn how their money comes and goes.
- Praise for Every Penny They Save
Positive feedbacks have a long-lasting impact and go a long way. Every time your child controls their desire to buy somethings and instead chooses to put money on their saving piggy bank, be sure to praise their decision. Express your pride in your child’s effort to save for the future rather than splurge in the present.
- Encourage Even if They Spend
Kids are kids, and despite your best advice, they may spend on something other than what they were saving for. They may have regrets later, and that’s where you should step in. Your role is to motivate them to start saving again.
We understand that for some parents teaching children how to save money can be an uphill task. However, it is necessary to prepare them for financial responsibilities and secure their future. Remember, kids are good at imitating, and they copy everything that they see. So, lead by example.
Besides, do not forget to encourage and praise your child when they do well in budgeting and saving their money.