Saving money is one of the most important steps toward building wealth and having secure financial security. Yet many of us have learned the importance of saving money through trial and error, and more importantly, experience.
In school, we aren’t taught about the importance of saving and many of us find that as adults, we have to fend for ourselves.
But we can start teaching our children the importance of saving from a young age. If you are a parent, here are some ways to teach your children about saving money.
1. Use piggy banks
A piggy bank can be a great way to teach your kids the importance of saving. Tell your kids that the goal is to fill up the piggy bank with dollars and coins until there is no room. Tell them the piggy bank is for saving money for the future and that the more they save, the more their money will grow.
2. Give Them Fake Money
Fake money is a great way to teach young kids about the value of money without giving them hard-earned money. Think of it as training wheels for budding consumers, with you (the parent) playing the dual role of banker and merchant. You can also give them games like monopoly.
3. Discuss Wants vs. Needs
Teach them the value of saving is to help them distinguish between wants and needs. Explain that needs include the basics, such as food, shelter, and clothing, and wants are all the extras. You can use your budget as an example to make them understand how wants should take a back seat to needs in terms of spending.
4. Set an example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your jar of money that you put funds in regularly. When you’re out shopping, show your children how to differentiate between various prices and explain why buying one item makes better sense than another.
5. Let Them Earn Their Own Money
Rather than giving them allowance pay them for small household chores like cleaning dining tables, clean their room, etc. By this, they will learn the value of their hard work.
6. Let Them Make Their Purchases
Allow your kids to buy something they want. For example, if you’re going shopping, let them know they’ll be responsible for their souvenirs. It will cut down on them asking you to buy something, and it will teach them the value of buying things for themselves. Plus, it’ll make those decisions feel more real if they are making purchases using their own money.
7. Give them a budget
You can give them money and set a budget for a week for them and teach them how to share the percentage of funds between saving and spending. By instilling these habits while they’re young, it’ll be easier for them once they’re dealing with larger sums of money.