Do you ever look back at your younger years and wonder how much money you have if you hadn’t made all those little purchases? If you’d think twice and maybe save a little more? Hindsight is 20/20, but for our children, as far as money is concerned, it doesn’t have to be! Start by teaching good spending and saving habits.
At school, we’re taught how to count money, the value of each coin and note, but not how saving accounts work or the importance of putting money aside for a rainy day…as kids we think that buying a house is boring, and who needs a car when you can walk, catch the bus or roll on your roller-skates everywhere, right?
Teaching your little ones the importance of savings and investments – check out this website for more information on investments – and introducing them to good spending habits, doesn’t have to mean long talks about interest rates, or the positives of stocks, shares and ISA’s…follow these simple ideas and you’ll have them thinking about the way they spend and save money – without even noticing!
Show them how actual money works
We’re living in an ever-increasing, digital world. Where we can purchase things with a simple click, the touch of a screen or the tap of a card, it doesn’t really give us the feeling of parting with money, so with young children, it can almost feel as if they’re getting something, for nothing! Using physical cash is a positive step in making your child more conscious about spending. If they can see a sum of money, physically depleting, then they’ll have a greater understanding of the value of money itself! And of course, counting all those pennies, coins and notes are great for both math and motor skills!
Commission/allowance
Giving your child an allowance is a positive way to show them how to save. They can begin to save for something they really want and understand that they won’t have to be bought and paid for! Aim to treat them to their allowance after completing chores or their own set of little tasks around the house. That way, they’re earning a commission for hard work (like in real life), rather than being given money for simply existing.
Let them see their savings
Let them save their money in a clear jar! It might sound a little dull, but if there’s something specific that your child is saving for, let them fill their jar with cash until the total amount has been saved will teach them valuable lessons in patience and saving. If they have their eye on more than one thing – most kids do – then give them more than one jar and let them distribute their savings as they wish.
Set a good example
As parents, we try our best not to pass on our children’s bad habits, whether leaving the toilet seat up, foul language, or being lazy! Consider your own spending habits, and exercise restraint from time to time by saying “no”. Your child has to understand that sometimes there’s no money for fast food or toys. It’s a hard but valuable lesson.