When you have children, you want the best for them in every way. This wish is especially true when it comes to their financial security. As a parent, you can do everything in your power to ensure they have the financial means to achieve their goals and have access to every stepping stone they need to be successful. But you also need to lay the foundation to help instill in them the importance of saving money. Here are a few helpful tips about teaching your children about saving money and financial literacy.
The sooner you start introducing your children to different concepts about money and savings, the better prepared they will be as they age. When your kids are young, around the ages of 2 or 3, you can help them learn the different names of coins by showing them the coins and repeating their different names. You can also play store with them and introduce them to commerce basics with exchanges of goods for money.
As they grow up, you can begin getting them more involved in different processes like going to the bank, withdrawing money from ATMs, and showing them the benefits of saving money each month. Parents.com has a great article about what you can do at different age groups to get your kids more familiar with money and savings.
If you’re a parent, then you’ve most certainly heard your child say they want some toy or game. While it is ok for them to get something they want from time to time, parents should also explain the difference between wants and needs. Show your children that needs are more critical and contain things like food, shelter, clothing, and education. On the other hand, Wants are other items like toys, meals out, or a movie.
Instilling the value of money in children comes easy when they understand they have to work to earn. The easiest way to help your children start earning money is by paying them an allowance for chores around the house. By giving them money for doing chores, you’ll show them that money needs to be earned and that if they want something, they can purchase it themselves with their own money.
While working for money teaches children about the value of hard work, they also need to know that saving their earnings is crucial. Kids can fall into the bad habit of spending the money they have quickly, but with an allowance system, you are showing them that they need to spend their money wisely. If you only give them a certain amount a week for doing chores, children will begin to realize that they were only getting that amount each week. This realization will help them understand that they need to start saving their allowance if they want something more valuable.
After your children understand they have to save, you need to provide them with a place to keep their hard-earned money. With younger children, you can use things like a piggy bank or cookie jar to collect and store their money around the house. Piggy banks or jars that are seethrough are beneficial here as children will see their savings grow physically. Once they get older, you can open up a savings account for them at your bank and introduce them to the processes of depositing money into their accounts.
These tips are certainly helpful for teaching your children about saving money, but nothing is more effective than leading by example. Kids learn the most from their parents, the people they trust most. Put money away in your savings account, or keep it safe somewhere around the house and show your children that you are doing this to prepare for the future.
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