Some parents think that their children should not be taught about finances as they are very young and may not be able to understand what saving up means. Actually, the earlier you teach them, the better.
There are many ways you can teach your children to save up. To help you get started, below are some of the things you may want to consider:
- Inform them the difference of needs and wants
Explain to them the difference of needs and wants. Let them know that needs must be prioritized, like food, shelter, clothing, utility bills etc. Knowing the difference of the two will make them understand why their wants like mobile phones, computers, signature bags or shoes will not be prioritized.
You can explain to them in layman’s terms the difference of the two, give examples, show photos so they can understand better.
- Let children earn on their own
It is not that you will ask them to work outside your home or earn for the family, let them earn in a way that they would understand how hard it is to earn money. Like you can ask them to clean their room in return for a small monetary token or you can ask them to learn to play guitar for a fee.
Of course, you won’t obligate them, make them responsible to earn for your family or play slots from Slots Like to win big. You are asking them to do all these only to make them understand that money is hard earned. If this you do, you are making them understand the value of money in a more in-depth manner.
- Give them a piggy bank
Give them a place where they can store their money. You can give them a piggy bank, a wallet or a bank account under their name. Encourage them to put some of the money they earned or gifted to them in their piggy bank or whatever it is you give them to keep their money.
Seeing their money increase will motivate them to save more. You can let them use it at the right time.
- Let them track their expenses
Give them a book where they can track down all their expenses. This is a good way to make them responsible for their spending habits. Once in a while, invite him/her to review his/her expenses with you.
Let him/her identify the needs and the wants from the list. You may also want to know his/her reason why he/she spends money on a specific expense and correct his/her reasoning if necessary.
- Be a good example
Show your children the right way to spend and save up money. They have to see how you value money and how important it is to save up. You are their one and only example, hence it is very important that you become very responsible with your actions, not only with financial aspects of life but to all. They will follow whatever they see in you, so you have to consider the right thing all the time.