Saving is a concept that the majority of people struggle with; and not because they don’t understand it or know of the importance of saving, it is seemingly a difficult plan to implement. Most adults struggle with financial management because they grew up in home where they were taught everything except how to handle money.
Some parents are willing but they just don’t how to teach their children about money. As a parent, it is important to have the money talk with your child and use appropriate illustrations to teach them about the importance of savings.
Saving requires a high sense of discipline which is not acquired overnight. It is a skill that requires deliberate effort to make it succeed. Savings lies heavily upon one’s self-discipline. For children, it is better to start instilling in them this discipline so they grow up with proper financial management skills for future success.
When to start
As children grow, they are molded in various ways; emotionally, spiritually and mentally. At this point when they’re receptive and adaptable to new ideas which makes it great to start teaching them also about the importance of saving.
In summary, start now.
You can first start of by sitting them down and explaining to the child what saving means, using the most basic of terms and with simple examples.
You could start by the basic of a reward scheme. A reward scheme teaches and motivates your child to earn and save money. By telling a child that over a period of time, whatever money they’ll have left over from their allowance (assuming you have a system in place), you’ll reward them. This could be by doubling whatever the amount they have over and helping them get something they want. This will instil a sense of motivation in them and something to look forward to.
Teach them how to bargain
Give your child a specific amount of money in the form of a stipend or an allowance and make it clear to them that you will no longer cater for their certain needs. This would mean that, they would have to prioritize their expenditure. This in a sense would lead to saving as the child knows there are things he or she needs to plan for certain activities in the future. If they want big-ticket items, then they have no option but to save for it.
Remember however that the goal here is to teach, not punish. Teach them how to bargain and where to get Sample Free Stuff so their money lasts longer.
Once you can comfortably leave them to plan for what they need, then you can move on to letting them handle more responsibility. This can be done through simple responsibilities like putting them in charge of the food budget during a family trip. Give them the reins to take full charge of the family food needs and abide by their decisions, whatever they are. Later on, you can assess and provide feedback on their performance.
This kind of easing the child into the saving culture would not only teach the child the value of saving and preparedness but would also expose the child to more responsibility and appreciate the concept of money.