Teaching a child the importance of saving money for the future and the proper ways to do it, is a very important step in preparing them for their financial responsibilities when they reach adulthood. It’s a lifelong habit that should be developed even at a young age. Obviously, you don’t want to bore your child with money and finance discussions because seriously, who does that?
So here are a few fun and useful tips and tricks to teach your child about saving and spending:
Set a good example.
Before anything else, make sure that you “practice what you preach” so set a good example and act how you want your children to act when they become adults.
Make a savings goal chart.
Kids always ask for toys or games, so before giving in to the request, let your child “save” for it. Together with you child, make a savings goal chart indicating the amount of time he/she needs to save up. You can represent each day with a symbol and let him/her color or put stickers on each day that he/she was able to save. This way, your child can see how much more money needs to be saved and see him/herself getting closer to his/her goal.
Use colorful containers/envelopes.
Another way to train your child is to introduce a “budgeting system” with the use of colorful envelopes, jars, box or any container. Each container will represent different goals. Get creative by adding a photo of that “goal” and stick it to the container. May it be a picture of a toy, a trip to Disneyland, or whatever that he/she likes that you agree with. Also make sure to set a container/envelope for an “emergency” fund.
Offer your child earning opportunities.
You can set up a rewards system like having a monetary value to certain chores or good deeds that they do or when they get good grades. You can also offer to match their savings by offering a certain amount for the extra money that they get to save.
Take them shopping.
Bring your child when you are doing grocery shopping. You can give them a dollar or two to spend and help them compare prices and make better choices on whatever they wish to purchase.
Teach them how to prioritize.
When you children starts to get older, their goals and wants change so make sure to take time and teach them about what’s important and practical.
Open a savings account.
There are specific savings accounts appropriate for every age group so when your child is old enough to understand the concept of savings, money and interest you can help them open their own bank account.