How to Teach Your Child to Save Money with These 10 Proven Tips
Saving money is arguably one of the most valuable life skills you can teach your child. While many adults learn about saving late in life after they have wasted a lot of money, it is important to teach your children the art of saving while they are still young. Saving is an excellent way of empowering the young generation to become responsible when they grow old. Here are some reliable parenting tips you can use to teach your child how to save money starting today.
- Make a goal chart for savings
When preparing your child to start saving, make a chart that highlights the saving goals that you want him/her to achieve in a specific timeframe. For instance, you can include the number of weeks and the amount of money you want the child to save, like “Goal = $25 saved in 4 weeks.” You can then place stickers on boxes to label the weekly savings you want your child to have.
Let the child save from their weekly allowance so that he/she can identify the sacrifice and importance of parting with some of their cash as savings. The best thing about using this approach is that it makes it easy for the child to learn the art of saving. When saving, let the child have a monetary goal to achieve such as a toy to buy within a given timeframe.
2. Reward your child for saving efforts
Never let your child feel unappreciated even if he/she is making little effort and progress. Rewards and appreciation go a long way in enabling your child to feel motivated and encouraged to save more. You can offer treats like lunch dates or small prizes like stickers as rewards for saving.
When rewarding the child, it is important to look forward to offering treats and prizes that they are fond of. For instance, if your child loves swimming or going to the movies, you should promise him/her such rewards when they reach their saving target.
3. Be a role model
Children often look up to their parents as role models to inspire and show them how to do things. As such, you should be a good role model to your child by showing him how to save by doing it yourself. If possible, participate with them by having your own jar in which you will be making your savings alongside your child’s savings jar.
Being a role model to your child makes it easy for him/her to understand that saving is normal and can thus be easily achieved. While leading by example, you should also teach the child other useful money lessons like meaningful spending.
4. Help your child to set money priorities
As much as saving is an important skill and habit in children, you should also teach your child the need for setting priorities in life. This is because your child can save as much as a thousand bucks in a few months but then waste it on less useful expenditure. In such a case, there is no need to save as it does make sense to make sacrifices when saving and then waste all the savings.
Teach your child how to make a financial plan that highlights the important things that your child needs. Working without a plan is similar to purposing to fail. When you impart a sense of responsibility in handling money and spending it wisely, your child will have an easy time making worthwhile savings.
5. Use games to teach your child how to save
Children love playing games and as such, they are more likely to understand financial concepts better when they are taught using games. For instance, a game like The Game of Life is based on a monetary concept and can therefore be quite useful to teach financial and money management tips & skills to children.
In addition to this, there are movies and documentaries that you can use to teach your child how to start saving early in life. Ideally, children understand things better when they are taught using examples and learning methods that they can comprehend and have a better grasp of.
6. Start a conversation
When working on teaching your child how to save, it is important that you first start a conversation that revolves around money, financial plans, and the importance of saving. This makes it easy to use financial discussions as avenues of motivating and encouraging the child on how to save. Additionally, life skills and values such as reasonable spending and saving can be learnt best through conversations.
When having a conversation with your child on how to save, there is need to teach him/her on what needs and wants are. You should let them be able to differentiate these two so that they are able to establish a positive and economically viable relationship with their money.
7. Open a savings account for your child
Opening a savings account for your child in a bank that offers the best deals on savings is very important in showing the child the seriousness of saving. Teach the child the importance of putting money in a bank and reinforce their understanding and interest in making savings. You can also explain to them that the money will accrue interest and grow while in the bank.
8. Be practical
Have a practical approach towards your child’s saving abilities. For example, if you give your child an allowance of $50 in a week, you should not expect him/her to save $30. Instead, you can teach him to save a tenth of their weekly allowance. This is will make it easy for the child to have a good financial comprehension that will make it easy for the child to navigate their financial life.
9. Use life experiences that they can understand
As your child is learning how to save, it is advisable that you use real life and actionable experiences that the child can relate to. For instance, you should tag the child along when going for grocery shopping and teach him/her how to buy the necessary items to use within a specific timeline. In addition to this, you can use your shopping trips to show the child the need of having a budget before spending your money.
10. Establish financial independence
You should help your child to become financially independent at an early stage. This can be achieved by teaching the child how to save with a goal instead of wasting their savings on cheap items like candy. This will make it easy for the child to understand the value of money and exercise freedom with their money so that they can learn from their mistakes. This financial independence makes it easy for them to learn good financial behaviors.
Some life skills like saving and being responsible with money are not in school. Instead, these skills are acquired through real life experience and practice. Therefore, it is important to pass down this knowledge to your child while he/she is still young so that they can perfect their saving skills as they grow up in life!
“This post is written by Danny Nguyen from MyParentingJournal.com, a blog dedicated to parenting tips, advice, best practices, and resources.”
