Securing a financial foundation and building your own wealth starts with saving money. However, a lot of people have yet to learn about the importance of saving.
But this shouldn’t stop you from teaching your children the value of saving money. You can empower your kids for their future financial stability starting at any age.
Teaching children about money and saving can be a difficult task, but it’s an important step to set them up for long term financial success. If you’re a parent and you want to instill the value of saving, here are 7 tips for teaching your kids about saving money.
Start With A Piggy Bank
One of the greatest yet easiest ways to teach your kids the importance of money and saving is with a piggy bank.
Challenge your kids and tell them that the goal is to fill up the piggy bank until there is no more room left. Tell them the importance of saving money for the future and the more they save in their bank, the more they have for later.
Open A Savings Account
Once the piggy bank is full, take them to the nearest bank to open up a savings account as their reward for saving. Let them count the money they’ll deposit so they know how much money they have.
Allowing them to see how much they’re saving will encourage them to try and save more over time. They’ll also understand that their money will grow as long as they don’t touch it.
Discuss Needs Versus Wants
This can be a challenge, especially if you’re teaching younger children.
Discuss the differences between their needs and their wants. Let them know that needs are the basic necessities like food, clothing, and shelter while their wants are the extras.
Give them motivation to save more money.
If you’re having trouble motivating your child to save money, you can use the same incentive principles that adults use.
If your child has set a savings goal, reward them with a percentage of what they saved. You can also offer a monetary reward or gift once your kid reaches a savings milestone.
Lead By Example
As the saying goes, you need to practice what you preach.
Kids learn by example. And the best person to show them what to do is you. If your children know that you’re saving for the future, they’ll follow in your footsteps, too.
Children are perceptive. They pick up on cues. Show them that you can live within your means. When you’re at the store, teach them the value of comparing prices or looking for promotions to get better savings.
Let Them Earn Their Own Money Through Chores
Earning money is an important concept of saving.
Give your kids the opportunity to earn their own money by completing a list of chores. Completing the work and getting compensated will teach them the value of earning through hard work. It also gives them a sense of accomplishment.
Before the week starts, fill out a chore chart then post it somewhere you can both see it and their progress. At the end of the week, go over the list with them and see what they completed then pay them what you agreed to for their efforts.
Use The 1-1-1 Method
Teach your child the 1-1-1 rule for saving, giving, and spending.
This means that everything they receives, whether it’s a gift or a reward for doing a chore, they put it in three equal buckets of saving, giving, and spending.
Encouraging your child to spend, save, and give in equal amounts is a great way to develop discipline. This will also help them understand that money should not be spent immediately as well as teach them about charity.
Teaching your kids the value of money is something that they will practice through adulthood. Instilling spending and saving habits in them at an early age will help them achieve financial stability and freedom as they grow up.