Saving Money:Teach It to Your Child!

I think all parents want their children to be successful persons in their future, right? The ability to manage finance well is one thing that a person should have to succeed, at least not get into financial problem. Don’t you agree with this also?

I know that this topic isn’t a new thing; but I want to make a post about it just for remembering parents. Children can’t understand the money concept and the importance of saving money by themselves. It’s the parents’ role! If you want your child has knowledge and ability to manage money in the future; as parents, it’s important to build the good financial habits since the early age.

First, you should introduce the money concept. If your child already recognizes numbers, you can begin introducing the coins money by teaching the value of each coin. As we all know, children are good watchers and like to imitate their parents. Before teaching your child how to save money, you can give example by always putting coins in a piggy bank in front of her/him. Explain that you put coins in the piggy bank because you want to use the money later. By asking your child to accompany you shopping in a store; you can also describe the money function as an exchange means.

When your child is old enough and already has an interest to own things that she/he likes, well, it’s the sign that you can start teaching saving money to your child. It’s the right time! When your child wants to have and buy something, tell her/him that she/he can buy it by saving money first. After browsing google, I found some useful tips that you can apply to motivate your child in learning to save money. Here are the practical guidance for you:

• Give an allowance. Example: you give an allowance only $5 a week; but your child wants to buy a story book that costs $10. Let your child to make a decision about how much money she/he wants to save regularly. If your child can read and write already, teach her/him to write down spending and saving.
• Use match savings. Offer a matching contribution for every dollar your child saves. As your child grows up, you can less the match percentage.
• Encourage your child to make a wish list and display the pictures of the wanted items. If your child is saving money for a certain purpose, it can motivate her/him more.
• Give awards. For your child’s effort of saving money, once in a while you may buy your child a gift or take your child out to her/his favorite place.
• Open a saving account. If your child is old enough, encourage her/him to open a saving account in a bank and save part of her/his money on it. You can give the simple explanation about the bank functions and don’t forget to show the progress amount of your child’s bank account.
• Introduce a budget in a simple way. Introduce what a budget is by giving your child a simple explanation that she/he must divide up the money to different posts every month. Teach your child to make her/his own budget; ask your child to divide her/his allowance to three parts: saving, charity and spending.

Not only saving money, you should let your children know how to earn money; they must know that money is earned through work. To your older child, you can make a daily job to do list and encourage your child to finish all tasks. If you’ve already given your child an allowance once a week, tell your child that it’s a weekly salary for finishing the jobs during the week.

You’ve introduced the money concept; but don’t forget to also teach the generosity to your child. Don’t let your child growing up to be a money-oriented person! Take your child to every charity event in your local community and every visit to a local orphanage. You can also give example by giving money to charity regularly or in special moments such as donating money or other things to victims of calamities.