How to Teach Your Kids to Save Money?
Teaching your kids how to save money is one of the important aspects of living a wealthy and secure life. Yet so many of us fail to do so. It is a critical parenting step to prepare them for a long term financial success. However, saving money is not an easy task. It takes time to build this habit. In this post, we will show you how to set up your kids to spend and save money wisely and enjoy a secure financial future.
1 Distinguish between wants vs. needs
The basic step to teach your kids the value of money is to help them differentiate between wants and needs. Tell them that the needs, such as food, clothing, and shelter are all basic necessities and wants are all extras. Teach them to first fulfill basic necessities and then go for extras as and when needed.
2 Pay them for chores they do
The children will learn to save better when they will earn themselves. Give them an opportunity to do some household chores and pay or give a present from Prezzybox. This will make them understand how much effort it takes to earn money and will give them a sense of accomplishment. At the beginning of the week, give them a list of chores to be completed, and assess what chores have been accomplished at the end of the week and pay them accordingly.
3 Create a budget and track spending
Make your children create a budget that will give them an idea about what they can afford. It will help them realize the value of money and not to take things for granted. To make them a better saver, it is necessary to teach them to keep track of their spending. Tell them if they buy too many toys and candies, they may not have enough money to put in the savings jar.
4 Write down the goals
Writing down the goals will strengthen the idea of achieving short term and long term targets. When kids start achieving their goals, they will feel more confident about themselves and money management. Make sure they start with small goals, like buying an inexpensive toy from Bargain Max rather than going for a bicycle.
5 Teach by Examples
One of the best ways to teach your children to save money is by using examples. Who else could be a better example than yourself? Have your own savings jar and put more or less money regularly. While shopping, show your kids how to distinguish between things and explain why choosing one thing is better than another. Tell them how much you work hard for their living, food, college fees and so on.
Although talking to kids about money management is a daunting task, but it will help them build solid financial habits for the rest of their life. Starting the discussion as early as possible will enable them to make better financial decisions and live a debt-free life.