With these easy to follow lessons about saving money, you can teach your children how to be well-equipped with financial independence, and thrive in the world on their own.
Start small
When they’re at the age that recognises that coins, notes and cards are ways to get ‘things’ that you want, it’s time to teach kids about the instability of money. Some parents find it a hassle bringing their kids to the shops as they either need to buy them that toy or prepare for a public tantrum. To avoid this behavioural pattern give your child a small amount of spending money on your next trip, be it even 1 or 2 dollars. Every moment your child asks for something that isn’t on the grocery list, ask them the question, ‘do you have enough money for that?’. By giving them a little financial independence, your child will be able to learn how quickly money can be spent on a single purchase, realising the importance of spending smart.
Realise the art of patience
When you were younger, the amount of choice for kid's toys was limited, however in this day and age, the latest and greatest toys for kids can be on the expensive side. A quick stroll from one end of a shopping centre to another can be such a struggle for a parent as there are so many things that a kid would want to have. To help a child figure out their needs over wants, establish the 24-hour rule. This can apply for the whole family, because we all know that children learn from what they see. If you make it a common family rule to give any big decision 24-hours to think it over and see if it’s really worth it, everyone can learn the importance of being patient when making monetary decisions.
Teach them about money consequences
The older they get, the more expensive their wish-list becomes. As your child gets into their tween stages, it’s essential to teach them the difficult lesson of loans and debts. If they don’t have enough money to buy something they really want, let them borrow money from you with interest. If it is really expensive, have them pay for half through chores and half by borrowing. Realising how quickly interest can add up and owed money continues to grow can teach kids an important life-lesson. By learning this early on, children will be more careful with handling loans in the future.
Teach them the value of money
While many households reward chores with pocket money, this may not be an efficient method if the child keeps purchasing out of impulse when they see something. To efficiently and systematically teach a child about the worth of money and saving, an effective method can be to open a kid’s savings account. By providing your child with their own bank account, the excitement and thrill of having their own money managing account will give them a memorable and educational experience that they’ll use throughout life.
By teaching them practical lessons about money from a young age, children will be able to learn and develop healthy money management tips and habits that will stick with them for life.