How to teach your kids to save money
Raising financially savvy children can start with teaching them how to save.
Image: iStock.
If you ever had hoped to start saving money with your children, this is the time to start. Teaching our children about money and saving can be a very beneficial lesson for them in their adult lives.
Here is how you can set things in motion:
1. Buy them a piggy bank.
This might sound like a simple suggestion, but you will be surprised how effective it can be. According to the Savings Institute of South Africa, this can be effective because the younger kids can see their money stacking up. They suggest that you get a transparent piggy bank and make a mark on the target. Watching the money stack up in pursuit of the line is exciting for the kids.
2. Make them earn their money
Investopedia suggests that you make your children work for their money. This will teach them the value of money, and hard work. They will also use the money wisely and also save it because they worked so hard for it.
3. Teach them about needs versus wants
Most of the time, we find kids demanding things that they have no use for. Even when they save money, they will spend it on items that they rarely need. Teach them to make a distinction between needs and wants. If it is something they can live without, teach them not to spend money on it. This lesson might require some time, but they will eventually get it.
4. Let them set their savings goals
Working without a sense of purpose can be quite exhausting. Asking your child to save money without a goal can feel the same. If they don’t know what they are working towards, then they will not be excited to do it. It could be a financial goal. For example, they could want to save R100 a month. It could even want to save towards buying something for themselves. They know the price and set a time goal for themselves. Now they know exactly what they are saving towards and the savings project becomes more purpose-driven.
5. Model savings and good spending
Spending money on expensive and unnecessary items just to turn around and tell your kids not to is counterproductive.
The Savings Institute of South Africa says: “If you’re telling children to be wise with money but are rushing out to buy the latest phone or trendy fashions, what message are you really sending?”
Parents are the first point of reference for a lot of their behavioural choices. So let us aid them in making the right choices by making those ourselves.
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