It is really important to teach money saving to kids from beginning. This is an era of spending and if you want to make your kids learn personal finance, then childhood is the right time to teach the basics of personal finance.
When I was growing up , my family always had a very tight budget. And to add this, my father never thought of saving money. But my mother was very good with money and she always saved some money on the side, and that money will come out only in emergency. At that time, there were no personal finance blogs to teach them, But my mother was very conservative with money. I have learned some things about money from my mother and remember her always saying save some money, even if it is few bucks.
And the best part is that whatever you learn during childhood, it remains in memories forever. Because a child’s brain is receptive to new things. He/she will learn it quickly. I don’t say you cannot master personal finance in adulthood, but learning a new habit is easier than replacing an old one.
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Teach money saving to kids with these simple tips
1.Gift a clear jar to your child
Start teaching your kids money saving today and present them a beautiful clear jar. Make it beautiful so that your kid will feel excited about the idea of putting money into the jar. Jar is really good because your child can see how money is growing. Saving money is contagious. Your child will feel excited about the growing money. Explain them how money is growing in the jar. And you will see how kids feel so happy on their accomplishments
2. Help them make their saving goals
Making saving goals is not only for adults, it is also important to teach kids how to set goals. Sit with them and make them understand the value of making financial goals. First start by making goals for them, then as they will understand the basics of money goals, they will be able to set saving goals themselves.
3. Talk to children about money
Most of the time, money is not discussed with kids but it is important to talk about the money with the kids. They should know the importance of money, otherwise they will think that our parents have all the money to provide us with everything we ask for.
4. Explain the difference between wants and needs
Our wants are way more than our needs. This one is important for us adults also. Teaching young children the difference between wants and needs will make them financial savvy. It will be easy for them to make the decision of buying. Gradually they will start making decisions about what they need.
5. Encourage them to talk about their spending
If you give them money then discuss their spending plans with them. And encourage them to always talk their spending plans with you so that you would be able to know the spending habits of your kids. This way, you will be more likely to guide them if required.
6. Lead with an example
As with young kids, they watch you and try to imitate you. So, lead with the example. If you are into habit of budgeting and saving money, then your children will learn from you. Tell them how you are going to spend your money and will manage your house hold expenditure with the set amount of money.
7. Always try to avoid impulse buying
If you see that your child want something now then ask them to wait for some time and see if he/she still require it. It could be possible that prices come down for the said toy or dress in few days and you can let them buy. They will learn that after waiting, either they don’t want that thing or they could buy on less price. Either way, it is a win win situation.
8. Talk about budget and money by involving kids
Whenever you sit in family to discuss the house budget and money, start involving your kids . This way, kids will come to know how much money their family have and how they should behave to keep family finances under control.
9. Tell them to divide equal amounts for Spending, Saving and Giving
Spending, saving and giving are equally important. Teach your kids to always divide the money into 3 parts and keep the money for spending, saving and giving. Along with spending and saving, giving your money to the needy or at church, is as important.
10. Pay your kids for age appropriate chores
Give them money but only when they complete house chores. They should know that there is no free money. Money can only be earned. You cannot get free money without doing any hard work. Here a balanced is required to be maintained so that your kids can understand that some duties cannot pay them money. It is also their responsibility to help with dishes and cleaning. This will make them a more responsible person.
11. Teach them to save first
As we know, saving should come before any spending. Tell your kids to save money before doing anything else. After saving, whatever is left, buy stuff with that and don’t forget giving the money to someone in need or at community places. Money can be given to to any charity or someone in need.
12. Involve them in big money decisions
Oh yes, tell them if you want to buy a house or car. Ask them to contribute from their saving. Tell them the time when you will be ready to buy and you will need their help in buying. They can contribute from their own savings. This will make them feel important and they will learn the importance of saving before buying anything
13. Help them budget their pocket money
Whatever you give to your kids, ask them to make a budget around that money. They will learn to live under your means. I mean they will be able to make good money decisions.
14. Teach them three types of saving in Personal finance
The three types of saving funds namely emergency fund, retirement fund, and personal savings are all pillars of saving plans. Discuss the differences and how they can make decision to contribute small amounts to all of them.
15. Explain them how to delay gratification
Delaying gratification can save you lot of money. Teach your children to stay away from impulse buying and wait before buying anything. It is said that kids imitate their parents. So it is best to give a good example of how you will delay gratification.
16. Introduce them to investment
Gradually tell them what is the meaning of investment. Introduce them to the compounding effect. Teens can understand as they have to learn compound interest in their maths class also. Or discover your own way to teach them the compounded effect.
I will be really happy if your child start saving his/her money from now. Gift them a transparent jar and help them to walk on the path of financial success.
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