Learning financial management is an important skill that every child will eventually learn sometime in their life. Teaching them to save from a young age will make them feel familiar to the process of managing their accounts and being responsible for the savings they have. Parents have a responsibility to teach their children about these crucial skills so that they can grow up to be responsible adults who are able to make smart decisions on their own. Here are some ways that you can teach your kids to be savers, not spenders.
1. Set a Good Example
Children are like sponges—they absorb all what is around them. A home is a child’s first institution, and they learn what they see and observe around the house. If you happen to be a prudent spender and refrain from making bad financial choices, your children will automatically learn that from you and will do so without having you to sit them down and teach them to. Similarly, if you make bad financial decisions, that is exactly what your children will learn.
2. Open a Savings Account for your Children
Every child loves to feel like an adult. Opening a kid’s bank account is a great way to make them feel all “grown up” while teaching them the basics of financial management.
3. Reward Your Children for Saving Money
Offer small rewards as incentives for your children to save money. When they see that they are getting something out of it, they will be more likely to save in order to achieve that reward.
4. Make It a Game
Make savings a fun thing to do. Motivate your kids by making colorful goal charts that show how much money they have saved and how many milestones they have achieved. This way, your child will look forward to save money and feel glad when they have “leveled up” to another milestone.
5. Use Creativity
You can use creative methods to encourage children to save money. For example, if your child wants a new toy, you can assign a jar or envelope to them in which they will save the money that is required to buy that toy. The child can draw and/or write what they want on the envelope or jar.
Apart from teaching your kids to be savers, this method will also teach them patience, and the fact that sometimes it takes time to achieve what you need.
6. Let Your Child Make Mistakes
If you realize that your child is making a bad financial decision, guide them that it is not profitable, but if they insist, let them make the mistake. When they suffer the consequences, gently teach them where they went wrong. This way, they will make sure never to make the same mistake again.
7. Look Out for Good Deals
Today, it is very easy to purchase online, and get some good deals on purchases. For example, if you are about to buy a kid’s pool, instead of buying a brand new one, you can look up for used ones or the ones available in a different brand which gives a better deal. Sit with your kids and let them in with the discussion of which choice will make the best deal.
8. Help Your Children to Prioritize
You need to teach your child the importance of long-term planning. Have them make a list of things they want, and then ask them to prioritize. This way, they will learn to decide which items to spend money on, and which items to wait for.