You have been working for quite a long time and you also earn pretty well. You plan to get married to the love of your life and in a couple of years, you are blessed with a child. As your child grows up, you give him the best of things so that he is always happy. You also take care of your other responsibilities and never forget to save some amount of money for future needs too.
You know how to value your hard earned money. But your child is still young. Does he know how to save for the future? No. You must teach him that.
Teaching a kid about saving at an early age can definitely prove to a great thing for you. Your kids must understand if money is a weapon or a tool. The habits of your kids start developing at a very early age, say 7 years. However, if you have not started teaching him these lessons when he was seven, you can still start now. It is never too late.
You must reward your kids when they save
It is an extremely encouraging practice to make your child save some money. If you see that they are making an effort and saving on a regular basis, give them small rewards that would make them happier and encourage them to save even more. Ask them to save some from the monthly school allowances, money gifts received from the relative on Christmas, birthdays or other such occasions, etc. You can reward them by either adding a little more to their funds, which would look like a bonus for saving up, or you could buy small presents every month which your kids can look forward to.
Setting up a Goal
Set goals for your child with respect to savings. This way, both you and your kid will be able to track the progress made. This particular skill set will not only help your kid to manage funds in the future but also, help him in all the different aspects of life. Make them understand that there must a reasonable amount that should be saved by them.
You can help your kids to visualise a reward by asking them what they would like as a birthday gift or a Christmas present and then make him understand how much time he would need to reach that goal.
Children are not as mature as you are. Hence, you should always remember that their attention span is pretty short. If they have to wait for a couple of more months to reach their goal, they might just give up on the entire idea of saving up.
Thus, you must walk alongside your child and help him whenever he needs it. You can continue to motivate them and also add a few extra bonus dollars when they really need it.
Setting a good example
Everything is new to your kid and he will learn what he sees. Thus, it is of utmost importance that you put up a behaviour that makes an example to him. However, this does not mean that you roll out your entire savings plan in front of him. Give your kid pocket money. Be firm and tell them that this is how much they are getting and watch them make their own spending decisions. This will help teach money management from an early stage.
Play board games to help with visualisation
A fun way to teach your kid how to save and when to spend is by playing board games such as Monopoly, The Game of Life, etc. These games make financial concepts extremely easy and exciting to learn. Play the game with them and lead by example.
Children have the tendency to copy their parents’ behaviour. This way you can control what spending and saving habits they learn and copy from you. Additionally, even if the game isn’t real, they will be able to visualise having real money through the fake currency used to play the game and apply their learnings when dealing with real money. The rewards offered through having more money in such games might encourage them to save more in real life.
Another way to help them visualise would be to give them a small taste of the real thing. Take them for camps where you, and your kids, can participate in activities where they can have fun even as they learn something new. Such opportunities can present themselves in the form of summer camps or events like the Little Entrepreneurs Camp.
It actually depends on what you think is the best for your kid. They might not be mature enough to handle their own accounts and it is advisable that you monitor their moves to guide them through and help them understand the entire cycle of savings.
You can read some more Tips to Save Money Effectively.
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