Whether you like it or not, money makes the world go round. Once your kids are all grown up, they would have to deal with their own finances. It’s best for them to learn how to manage their money at a young age so that there’s ample room for mistakes and a wide space to grow.
As a parent, it’s your responsibility to teach your kid the importance and value of money in life. When they appreciate the hard-earned money and understand what it took to gain such power, they would eventually learn how to save and not just spend, spend, spend. At some point, we all have to control our wayward shopping habits and instead, save money for the future.
Here’s how you can teach your kid to save in 10 easy steps:
1. Teach your kid the difference between wants and needs.
Basic necessities all fall under one’s needs. These are food, water, basic clothing, healthcare, and education. Everything else outside of that spectrum is wanted or desire. So if you want to buy a new pair of luxury heels or the latest bicycle model, that is just a want to satisfy. Show your kid your working budget for the week or the month for them to understand further.
2. Set a good example.
You can’t teach your kid to save if you don’t have savings. Control your spending urges and save at least 10% of your monthly salary in a savings account. You may also set saving goals to buy something for the family. Make sure your kids are informed that you were able to buy a TV set or a new kitchen table because you saved up money for it.
3. Teach your kid how to track their spending.
Have your kids write down their daily expenses so they have an idea of where their allowance goes. By the end of the week, add the total with your kid and see how this information gets digested. Whatever the amount is, big or small, will be a factor in how your kid will be spending his or her allowance the next week.
4. Set how much your kid can save.
After knowing how much money your kid spends in a week, both of you will have an idea how much she or he is capable of saving or you may adjust the spending accordingly to give more leeway for saving money. Maybe start with asking your kid what he or she wants to buy. Check the price and compute how many days and weeks your kid has to save in order to get that goal.
5. Provide a tangible place for your kids to save and monitor their savings.
This place depends on your kid’s age. You may opt to give them a cute piggy bank where they can throw in change or even bills for the day and count it themselves whenever they like. When they’re already older, open a bank savings account for them so they can see in their checkbooks how much they’ve been saving so far.
6. Give them a workstation where they could count their savings.
This is also the desk where they can log their savings in a notebook or journal. Flexispot’s height-adjustable ergonomic study desk is perfect for growing kids and teenagers. Its desk height range is from 29" - 48.6" and can be easily lowered or raised using the table’s smooth adjustment. It’s stable and sturdy at any height. The high-quality chipboard is also environmentally friendly and safe for your kid.
7. Give your kids an incentive when they reach their saving goals.
The reward system is still alive for a reason and it’s simply because it works! Offer your kids an incentive when they reach a savings amount they’ve been working towards. It’s just comparable to a bank that gives incentives to its credit cardholders when they pay their dues on time.
8. Lend your kid money payable with interest.
If there’s something they want to buy at the moment, don’t say no immediately. This may be a good learning opportunity for your kid to understand the value of saving money before spending. Act as a creditor and lend the money your kid needs but make sure you add interest to what he or she has to pay after a certain period of time.
9. Make kids work hard for their money.
They would value money more if they worked hard for it. Have them do chores or give them study goals in exchange for their allowance. When they understand that they have to work hard for money, they would value it more and set it aside than spend mindlessly.
10. Keep the conversation going about money.
Maybe you don’t want to burden your kids with money problems in your household but always talk to them about the ebb and flow of money even on a national and global scale. You may skip the technicals but give them an idea of how investments and money systems work.
When it comes to saving money at a young age, your kids are just learning to control their spending urges to be able to set aside some money for saving. Give them room to grow and make their own mistakes. Guide them but let them be in control of their money. Once they learn the value of money, they’ll be saving on their own.
Saving is an important skill that could help them later in life, especially when they are already paying their own bills with their own hard-earned money and even more when they already have their own families and households to manage.