Whether you’re young or old, the merits of saving money can never be understated. For starters, it cushions you against financial distress, provides investment capital, and gives you a sense of financial freedom, just to mention a few. Unfortunately, our education system does not put much emphasis on financial education. And even when it does, most of us learn the importance of saving either too late or through trial and error. This compounded by consumer-driven economies essentially makes saving a non-priority. It shouldn’t come as a surprise that a 2019 report published by Statista showed that an estimated 45% of the American population had no savings.
Worrying as the number may sound, it is true. As a parent, one of the best legacies you can leave your little ones is to teach them how to save early on in their life. By doing so, you’re not only teaching them good financial disciples but also laying a strong financial foundation to build on.
In this article, we are going to explore practical tips to teach your kid how to save money. If you’re a video gamer looking to save time, instead, check AskBoosters for professional boosting services.
6 Money-Saving Tips To Teach Your Kids
- Introduce a Piggy Bank
Getting a piggy bank for your little ones is an excellent way of teaching them about the importance of savings and the overall value of money. Along with that, it allows them to set saving goals and achieve them.
Another good thing you’ll love about piggy banks is that you can choose between the physical, toy-shaped ones or even the digital piggy banks. Countries like Switzerland have recently rolled out digital piggy banks to encourage young people to embrace the saving culture.
- Make it a Game
If your little ones are relatively younger, you can teach them how to save and have fun while at it. Kids are always drawn to competitions, and by making saving seem like a competition between the siblings, you heavily incentivize them to save. For example, you can introduce a top-up bonus for weekly or monthly targets achieved or even double their saving amount once they hit a predetermined target.
- Give Your Kids a Budget
Although teaching your kids how to save on a piggy bank is important, it’s equally important to teach them how to prioritize and budget their money. By learning the trick of budgeting at an early age, handling larger amounts of money in the future becomes much easier.
For this, you need to give them a weekly stipend and allow them to budget for it. While at it, explicitly tell them you don’t expect them to come back for more midweek. Still, instilling the virtue of patience also comes in handy in encouraging them to dave. For example, if they want the latest PlayStation, tell them to wait. This delay concept teaches them that if they want something, they may as well wait or start saving for it. You’ll be surprised by their commitment towards saving, especially if they badly need something.
- Make them Part of the Process
The best way to effectively learn something is to get involved in it. Therefore, while teaching the kid about saving money, you need to involve them in every part of the process. When going out shopping, for example, you need to tag them along and introduce them to the discounts sections. While at it, you can teach them how to redeem shopping coupons, as well as compare prices.
- Open a Bank Account
You’ve introduced a budget or even a piggy bank. But what happens once they’ve reached their saving target? Well, opening a bank account can help, especially for much older kids in their teens can help. Not only does it encourage them to continue saving but also gives them the satisfaction of knowing they have some money in their name.
And once you’ve opened the account and deposited the whole amount, proceed to educate them on how banks work and the power of interest rates. After all, who wouldn’t want to continue saving if they knew their money will continue growing over time as long as it’s not withdrawn?
- Create a Timeline
Although the concept of saving may be alien and hard to grasp for kids, timely and consistent financial lessons help the message sink in eventually. And one of the best ways to drive the message home is to have a clear-cut timeline and visualization on when they are expected to reach their goal.
For this, you need to create a realistic and practical target, as well as illustrate the possible scenario for them. For example, if they have a weekly stipend of ten dollars and they want to save two hundred, you can illustrate how saving 100% of their entire stipend works. Continue creating every possible scenario for the same budget but with different percentages and track their progress.
As a parent, teaching and encouraging your kids to save is important. It lets them purchase items that would have otherwise been out of reach, makes them financially independent, and ultimately keeps them out of financial troubles. Most importantly, they’re able to do more in the future as their savings grow and easily attain their dreams in the future. The key lies in starting small and making it a routine as they grow. And with the above saving tips, your little ones shouldn’t have a problem mastering the art of saving.