Money is an essential part of life, and it’s never too early to teach your children its value and the importance of saving, so they will be equipped to spend sensibly when they grow up. Learning the principles of responsible handling of money should give them many opportunities for advancement when they are older, which is why it is important that, even at a young age, children cultivate a respect for money.
1. Expand on the basics of math
Once your children start school and learn the basics of math, begin to educate them about money and give them some practice. Play money games at home, or download them to your computer and/or tablet. This way, your child will learn how cash is actually used.
2. Get them a piggy bank
This simple action will teach your children the importance of saving, and engender a sense of responsibility towards handling money. Encourage your children to save a certain amount in a particular time frame, or suggest they save coins of a particular denomination. Make it a game as well as an aim, to keep it interesting. On your chosen date, open the piggy banks and count the savings. Make some sort of visual record, to encourage your children to save more, and teach them the basics of simple record keeping.
3. Familiarize them with the bank
Take your kids to the bank and open savings accounts in their names. Let them talk to the teller and conduct their business themselves. Make sure they understand the terms and conditions of the account, and suggest they commit to depositing regular amounts on a weekly or monthly basis. For more convenient banking, ask if the accounts can be serviced online. Having their own bank account will give your children a feeling of achievement which could even motivate them to save more.
4. Encourage them to plan how to spend their savings
Planning for future spending motivates your children to achieve their savings goals. It reminds them that with enough money, they can buy whatever they want. Allow them to dream big, and encourage them to save more, so they can achieve their goals more quickly.
5. Let them do their own shopping
Give your children their own allowances when you go shopping. Then you can observe their attitudes towards spending money. If your kids want to spend more than their allowance, advise them to be more frugal and more patient. Educate them on sensible spending and explain the priorities when shopping. Also, remind them that at the end the day, the most important thing is that they can buy what they want, because they were able to save money in the piggy banks.
6. Pay in cash
Credit cards are a great temptation to spend money you don’t have, then pay more for the privilege later. Show your kids that the best way to buy things is with the money in their pockets. Keep it real at all times – handing over cash is the best way to learn how to use money responsibly.
The best way to teach your kids the value of money and the importance of saving is to lead by example, and allow them some responsibility. Give them an allowance for the things they might want to buy, and encourage them to save in various ways. Familiarize them with simple record keeping and the way savings accounts work, and leave the credit cards at home when you shop with the kids. These simple but effective measures will help them to learn how to handle money responsibly, and equip them for adult life.