Saving money is one of the best habits to learn, but it can take some time and determination. Teaching your children to save money is one of the best life lessons you can give them.
A large portion of adults have no savings set aside to cover emergency expenses, or to see them through retirement. Keeping that in mind, you need to get your kids to learn the importance of saving money, and learn how you can get them into the habit from young.
Here are some things you can do to get your kids into a money-saving mindset.
Discuss Needs Vs Wants
To teach your kids the value of savings, you need to help them distinguish between needs and wants. Help them understand that needs include basics such as shelter, food, and clothing, whereas wants are all the optional extras.
You can show your kids your own personal budget (simplified a bit) to show them how needs require the most attention and wants fall a bit short when it comes to spending.
Allow Them To Earn Their Own Money
Money is a lot more valuable when it is your own. Allow your children to earn their own money, either through an allowance or by doing chores for money at home. Help them budget their own money, with a small portion used to buy things they want, and a larger portion put away for savings, or to build up to purchase an item they want.
Having them do chores for money also teaches them the value of hard work, and how money does not come by so easily.
Set Savings Goals
For kids, saving with no goal in sight can seem pretty pointless. Help them to define a savings goal, to keep them motivated to not needlessly spend their money.
Ask what they are wanting to save for, whether it be a new video game or toy. Break it down into small goals for them to achieve. If they are needing to save $40 for a toy and get $15 allowance a week, help them work out how long it will take for them to reach their savings goal.
Give Them A Piggy Bank
Once you have explained saving to your child and they are on board, you need to give them a place to save their money. Younger kids will enjoy the idea of a piggy bank. Older kids might be more open to having their own savings account at the bank. Having a place to save money will allow them to see how their savings are growing, and that they are making progress towards their goal.
Tracking your spending is a great skill to have. It can start from young. Have your kids keep a journal or sheet on spending. Get them to write down what they spend their money on and how much they have spent. It can be quite an eye-opening exercise to see how much money they actually spend in a week!
A Lifelong Lesson
Saving money might not seem like a fun activity for a kid, but they will be very thankful later on in life when the savings lessons you taught them have helped them build up a nice nest egg for emergencies and their future!