Teaching Kids to Save, Start Early
May 17, 2009 by admin · Leave a Comment
Teaching kids to save is a process that should start early. It takes children a while to understand the concept of how to use money and the purpose of saving it. It is smart to introduce the concept of saving to your child when he is around five years of age (or thereabouts). Make his allowance connected to helping around the house, doing chores, etc. In that way he understands the value of money and that it must be earned.
Doing this helps your child as he grows to understand that he sometimes must choose between instant gratification, such as buying a chocolate bar, or saving his allowance to buy something bigger, such as a toy he has his eye on.
As your child ages you can tell him a little about the household budget and explain about how money must go to pay bills while other money is for spending on household needs and yet other money must be saved for future considerations.
Only you and your child can decide when it is the best time for him to open a savings account at the bank. Bear in mind that your child may make mistakes with his money but you are there to assist him and guide him in terms of making smart financial choices.
Other Suggestions
When it comes to teaching kids to save, what other advice is worth knowing? Here are some suggestions that can help you in teaching your children about personal finance:
-As previously mentioned, don’t just give an allowance to your child; make work in the home a prerequisite. This shows your child the value of earning money. Tell your child how much he can earn and what he needs to do to earn it. Also let his know what items he is allowed to spend his allowance on and if he wants a little extra what he needs to do to earn that.
-Teach your children that budgeting is important and that they cannot simply have everything they want.
-Help your kids to separate the needs in life from the wants. Let them know that sometimes when money is tight, the wants such as money for entertainment or new clothes, must be put aside for the absolute necessities.
