People often get lost in material possessions, good times and in the need to have it all. Having everything is not necessarily the responsible way to get through life and can push many individuals to knocking on bankruptcy’s door. Teaching your children about money will not only give them the value of hard work, but it will also allow them to make robust financial plans and informed decisions.
Teaching kids about money wasn’t something that happened to a lot of them while they were growing up. In one way or another, this illiteracy about money management somehow affected how a lot of kids approach the concept of investment later in their life. It proved harder to master the concept of banking, or more so how to save money, and save it for the long term. This is why every parent should take a concerted effort to teach their children or ward the fundamentals of saving and banking.
If you are a parent, here are 5 ways to teach and Encourage your children about saving money.
1. START WITH A PIGGY BANK
A piggy bank can be a fascinating way to grab the attention of your kids and teach them the importance of saving. Let your kids understand that the goal is to fill up the piggy bank with coins, until there is no room. Let them know that the piggy bank is for saving money for the future and that the more they can save, the more their money will grow.
2. OPEN UP A BANK ACCOUNT
Take your child to the bank to open up a savings account as soon as the piggy bank is full. Have them count how much money is going to be deposited, so they can have a physical and mental understanding of how much money they have in the bank. Show them the final number and emphasize the idea of interest. This will provide a great source of motivation for your kids if they understand that their money will grow over time as long as they don’t touch it.
3. USE DIFFERENT ENVELOPES or JARS
You may be familiar with the envelope budgeting system for your own money, but this can also work for children. On either envelopes or jars, have your child draw pictures of what he or she wants. You may also want to help your child understand that some items will take longer than others to save for.
4. OFFER REWARDS FOR SAVING MONEY
Always try as much as possible to offer reward to your child for saving his or her money. Much like my credit union, which offers Umbrella, T-shirts, pen and other prizes, you can offer prizes to your children.
5. BE A GOOD EXAMPLE
Children like to mimic and follow the footstep of others especially their parents. One of the best things you can do to persuade your child’s saving habit is to let your child see that you also save money too. Put money in a jar while your child is there watching you and let your children know it’s your savings jar. This will show your child that saving is a “normal” thing. Since most young children want to be like their parents, seeing you saving will provide them with money lessons that further inspire them to save.