Understanding the importance of saving from a tender age will make it easier for your kids to manage their money when they grow up. In this day and age, they are bombarded with the temptation to spend money without thinking about whether the item is necessary. Kids often don’t think of saving towards something they may need in the future.
It is never too early to teach your kids the importance of saving money. They should learn how to set goals, budget, and spend wisely. Below is a guide that will instruct you on how to teach your kids how to save.
1. Discuss the Difference Between Wants and Needs
Explaining the difference between wants and needs to your children will help them understand the value of money and saving. Teach them that needs encompass things such as food, water, basic clothing, and healthcare while wants consist of things that are desired but not necessary. For children, wants are generally toys, candy, the latest technology, or designer sneakers.
Once they learn the difference between the two, it will be easier for them to learn how to budget effectively. This way, they will learn to prioritize what they need over what they want.
2. Use a PiggyBank
A Piggybank is one of the most effective ways to teach children how to save. Having a piggy bank makes it easier to organize loose change, and the money adds up over time. It can be rather exciting for children to feel it get heavier each time they add coins to it. Owning a Piggybank helps to reinforce the ‘always be saving’ philosophy.
3. Offer Saving Incentives
Incentives are one of the best ways to boost motivation. If you have been struggling to motivate your children to save, offering incentives could work in your favor and theirs. Start a match percentage to fund particular goals your child has. Suppose your child is saving for a tablet for school; you could probably split the funds 50/60 or 60/40, whichever percentage you see fit.
4. Encourage Them to Earn Their Own Money.
Only when an individual begins earning his own money will he understand its value! Offering an allowance for chores done around the house, baking cookies to sell around the neighborhood, or even pet sitting are great ways for your children to earn money.
Learning how to earn money will grant them budgeting skills and experience with spending. It will start them on their journey towards financial literacy, which some adults do not possess. Earning their own money will help them save and possibly teach them how to negotiate salaries based on the work they do.
5. Be a Good Role Model
Children are very impressionable and usually mimic the behaviors of those around them. If you want to teach them how to save, you must set a good example. Allow them to see you actively saving, whether it’s depositing money into the bank or having savings jars at home. A little encouragement goes a long way.
Kash Kids provides exceptional opportunities for children by teaching them financial literacy by empowering them to make the right financial choices. We believe that children should learn these important lessons from an early stage so that as they become older, they can apply what they have learned and successfully achieve their financial goals.