Teaching Your Child to Save Money
Getting off children in the right direction is the dream of every parent. Even though there are many ways of facilitating this, teaching them how to save is among the most important ones. As a parent, you want your children to succeed as much as possible. More so, you are interested in having their future secured. You do not want them to stay anxious that they may never achieve their goals.
Did you know that only 26% of 13-21-year-olds surveyed said that their parents taught them how to manage money? This is research from JumpStart Coalition for Financial Literacy
Again, the secret to overcoming all this is by teaching them why saving is important. The truth is without the right foundation in money management, there is no guarantee for a good life. In today’s day and age, it is so easy to have access to credit and live beyond your means. Without a proper foundation, bad choices can lead to a lifestyle that will prevent your children from getting ahead.
Here are a few ways of getting this often elusive thing right for your children.
The value of savings
Many children will not immediately grasp the concept behind the idea of saving. Therefore, it is your duty as a parent to make them understand why they shouldn’t spend all their money.
You need to make them know that money is valuable. For example, if your kid wants to buy a toy, don’t just rush to the store and buy it. Let them work for it by saving. It is important to work with your kid through this process. For example, if they want an item priced at, say, $30, you can help them save half of the money. Offer to top the remaining amount after they have successfully saved.
You also need to provide your kids with the options of reaching their goals. For example, teach them the essence of saving their allowance in full rather than in portions. Help them understand that this will save them the pain of saving for a more extended period to achieve their goal. The significance of this is that children will learn how to gauge options when they have money.
How to show good examples of savings
Your children will be looking up to you for advice on financial information. Therefore, ensure that you maintain a close relationship with your child throughout the entire learning period.
Nonetheless, it would of little impact if you encouraged your child to save, yet you do not lead by example. However much you encourage them to save without showing that you are also saving, everything will be futile. Hence, you must first follow your advice. Let them see the dollars you have saved for a particular reason, and they will be encouraged to follow suit.
It can be anything that sees you trying to save for an event, for a new electronics item, new vacation getaway. Talk to them about it. Share your struggles and most importantly share your goal. Once you achieve your savings goals and have shared the struggles and experiences, they can truly see what it takes to save and what the great outcomes are.
In our wazzCards app, we take learning financial savings to the next level for grade schoolers between 3 and 8! Our classrooms are designed for teachers and parents to provide an interactive and engaging experience while sharing and teaching the concepts of financial literacy and particularly “how savings works”. We get into the financial mathematics to help understand by using scenario based questions such as the one taken below:
As the above example shows, this question is in the deck for Grade 6 in the financial literacy Math section of the WazzCards app. You do these questions once you are sure that the children understand concepts of multiplication and addition to reinforce the savings principle in action.
Saving is the fundamental tool to financial liberty, and to teach in this case is really being involved in explaining the concepts and walking them through it as an example. Make them learn to achieve their goals via saving their allowances and any other cash.
Also, let them know that saving is key to money multiplication through interests. Compound interest can work for or against you depending on how you approach it. Educate children that if they invest in income-generating securities, they will reap from the compound interest in the future. This may be more advanced for grade school children, but children in grades 7 and 8 will be better equipped to handle it More on this on another blog we will be publishing soon.
Nevertheless, remember the rule of thumb is that you must first be a saver.
If you are looking to teach your children concepts of financial literacy, then check out our FREE WazzCards app. Nothing says savings like a FREE app 😊.
Or better yet, if you are a teacher, reach out at [email protected] to help you walk through the way the app works with a member of our team! We would be happy to assist!