10 Tips to Teach Your Child to Save Money
The first and most important habits associated with saving and accumulating money are formed in children under the age of seven. If you want to protect your child from rash and spontaneous purchases already in adulthood, you need to make some efforts in childhood. So the child will learn to save and manage money wisely.
There are ten practical tips for parents to teach your child to save money.
Present your child a piggy bank
The piggy bank for kids is the perfect way to raise money for their little needs. A child can hold the piggy bank in his hands and shake it to assess the amount of savings anytime.
Little trick: clear glass banks motivate children to save money more because they can see and observe that more and more money is growing every time.
Make a clear plan of action
If the child is planning to make any purchase, help him or her. A great solution is to draw up a visual action plan. You may draw up a colorful, bright scale for small entrepreneurs. It will become a guideline for him how close he has reached the set goal.
For older children, you can make a table with a list of basic desires. Also, you should mark in the table the deadline for achieving each of them and the cost and the amount that needs to be saved weekly. So you will teach your child not only to make a plan but to save money for their goals.
Put together a wishlist
Talking about a list, we are not talking about a boring shopping list. On the contrary, the list should be bright and colorful, ideally with photos of the desired toys that can be made in the store and printed at home. Be sure to indicate the price of the toy in the picture.
Then review the list once a week or twice a month to chooses the most valuable and desirable purchases for your kid. Thanks to this approach, the child will learn to independently analyze his desires, set priorities and make choices in favor of the most useful.
Help your kid to accumulate money
In order to motivate a child to save for certain things, it’s important to help him with this. No matter the age and complexity of the goal. Of course, goals and opportunities need to be weighed, since for young children. For example, buying a new iPhone would be an overwhelming task. We should choose something easier at the beginning. For example, buying a game console or a bicycle.
In this case, we are talking about financial assistance from your side. Tell your child that if he saves half of the required amount, you will add the missing part to him. You can also motivate your kid in the following way: for each $50 accumulated you can put $5 in the piggy bank. This way, the child will really feel your support and strive to save up as much money as possible.
Tell your child about money
Parents who don’t talk to their kids about money make a huge mistake. It turns out that the child understands that he is fully supported by his parents. When it’s not needed to make any efforts to get the cherished toys, the child doesn’t understand the value of money and doesn’t know why they need to save money.
At a more conscious age, it will be extremely difficult for a child to organize their own budget in the right way. Therefore, it is essential to talk with children about money, and not only about how you can earn it but about how to accumulate and spend it correctly.
Do not indulge your child in the desire to buy goods right here, right now
Yes, parents often have to deal with tantrums and spontaneous whims of children who want to buy their favorite toy “here and now”, and at the first request. However, such “Wishlist” in a child’s mind burns out very quickly – children quickly lose interest in such purchases. And this is due to the peculiarities of the biological processes that take place in the child’s brain at the moment of an aggravation of the feeling to master one or another object.
At these moments, a huge amount of dopamine is produced in the child’s body. This hormone is responsible not for the fact of purchase but for the feeling of anticipation of this very purchase. Therefore, in moments of tantrums, it is crucial to show restraint and patience. As well as explain to the child that there is simply no money to buy everything at once. The child also needs to demonstrate the following: it is important to make savings to buy the desired thing next time.
Trust your children to shop on their own
It is clear that we are talking about older children, from 5 to 6 years old. There is no need to be afraid to allow your kid to choose what to buy for home. For example, it can be bread, butter or milk, but over time, the list of products can be expanded.
Of course, the first times of independent trips to the store with a child, curiosities regarding a delivery may happen. However, this way, he will learn how to count money correctly. Moreover, independent purchases for the whole family are a preparatory stage for the child for their own expenses and the formation of a conscious attitude towards pocket money and money in general.
Respect the child’s choices
On holidays, children often receive good gifts from grandmothers, grandfathers and other relatives. Gifts can include a significant addition to the piggy bank. Parents often try to persuade their children to spend money on school supplies, clothes, shoes and other things that are important from their point of view. However, they don’t take into account the wishes of the children. Of course, this does not mean at all that you need to blindly follow the child’s lead, allowing him to spend all the money on sweets and other trifles.
Remember, the choice of the child must be respected. Try to convey to him that he will later regret such a waste of money. Agree with your child that he can spend a certain amount of money on various small purchases, and it is advisable to put most of the money in a piggy bank.
Do not deprive your child of pocket money
It is better to give out pocket money to schoolchildren for a certain period of time (for a week, for a month, etc.). In this case, the amount must be the same. How to spend the funds received, the child must decide for himself. He can go to a pizzeria with friends or buy himself sweets. It doesn’t matter because making an independent choice is an important stage in planning and distributing a personal budget.
You can teach a child to value money only by strictness and compromise. So, if he spent his pocket money before the agreed time – you gave him cash on Monday, and he spent it on Friday – the next “tranche” must be issued again on Monday. Otherwise, the child will understand that there is no pocket money limit, therefore, they can be spent in unlimited quantities.
Become a role model for your child — make your savings
Children absorb everything that happens in the family like a sponge, both good and bad. Therefore, it’s essential to build trusting relationships with the child, become an authority for him and be an example to follow. This also applies to the ability to accumulate money. Therefore, you can teach your child how to save money only by your own example. Save money and share your plans for spending it with your child.
If you are putting off going on a family vacation, be sure to tell your child about this. And add that you are already saving a certain amount of money every month to achieve your goal. Also, find out about your child’s desires to buy what exactly he wants to save money.
This will help you jointly determine the time frame for making the cherished childhood dream come true by saving money.
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