As your children start to grow older, there are a lot more valuable lessons we need to teach them in life. The importance of saving money is one of them. As parents, the current rising energy bills and house prices can feel daunting not only for ourselves – but also for our children’s futures too. The earlier we can teach them how to save money – the more prepared they will be for their own futures.
This guide is here to offer some parental advice regarding money – a topic that can be difficult to discuss. Below – are eight steps you can follow to help teach your child the importance of saving money.
Encourage Them To Earn Money
We want our children to know that money doesn’t get handed to them in life. Instead, it is earnt. Therefore, it can be beneficial to encourage your child to earn their own money. This can start at a young age. For example, you could offer to pay your child to clean their room. Of course, this doesn’t mean you have to pay them a lot, but it provides an incentive for their hard work.
Giving your child the opportunity to earn their own money allows them to learn how to use it. For example, they will learn that saving their own money could help them fund a new device that they want to buy. Take a look at some pocket money chores online to give you some inspiration. Some of the most typical ones include cleaning their room and washing up the dishes.
Allow Them To Set Saving Goals
As well as telling your children to save money, they must understand why it is important. Therefore, you should help them with this. Allow them to set saving goals to help them fund an item they want. For example, if your child wants a $20 toy – and earns $5 a week from their chores, help them calculate how long this will take them to save the money they need.
Doing this will help them become better at saving their money in the future. You can also reward them for working towards their saving goals to boost the motivation they need to keep their behavior up. For example, if they meet the halfway point of their saving goal, you give them an extra $5 to help them out.
Set Up A Savings Account
As your child grows older, they will need somewhere to store their savings. After all, they may quickly outgrow their piggy banks if they are reaching the teen stage. Conduct some research on savings accounts with your child as they will learn valuable lessons such as what interest rates are. It can also motivate them to keep up the good work.
You can also register for a child-friendly debit card. There are not plenty of these available online. Use the internet to learn more about them and find the best fit for your child. Ideally, you want to choose a debit card that notifies you when your child has made a purchase so that you can keep track of their spending habits – so they do not fall into any mistakes.
Educate Them On Providers
Does your child know how much their essential items cost? If not, it is time to open up that conversation. Most teens tend to have a smartphone, but the price of these devices can start to put a dent in your finances. Informing your child about the cost of these items will make it less of a shock when they have to pay for them themselves.
Teach them valuable lessons about how they can lower the cost of essential items by comparing providers online. For example, you can compare SIM-only deals using Lebara’s website. Their website makes it simple for you and your child to look into ways of lowering their monthly phone bill. Lessons like these will help them budget better as they grow older.
Allow Them To Learn From Their Mistakes
Teaching your child the importance of saving money is a process. You must acknowledge the fact that mistakes will happen along the way. For example, your child may spend too much money on an unnecessary item. Although it can be easy to steer them away from this mistake, sometimes it is better to sit back and let it happen. It will teach your child that they should look after their money rather than spending it on items they do not need.
This can be difficult for us as parents. After all, money is valuable, and you don’t want to see your child abuse it. However, these mistakes will lead to valuable life lessons. You will find that your child will not be tempted to do this again. It encourages them to put more thought into their spending habits. If they are making too many mistakes, it’s time to step in and resolve them.
Discuss What They Need Rather Than What They Want
Most children want specific items like a new toy or video game. However, it is important that you discuss with your child what they need rather than what they want. This will help them better understand why money is so important and that we cannot afford all the things we always want in life. Instead, we must save for essentials like food, water, and shelter.
If you are unsure how to talk to your child about their wants vs their needs, seek some advice by reading some online articles. There are plenty of tasks that you can do to help with this. For example, ask your child to write down things they need in life vs things they want. Discuss with them why certain items appear in one category instead of the other.
Lead By Example
Every parent should lead by example. If your child does not see that you value the importance of money, they will struggle to understand why they should. For example, earlier in this article, we discussed comparing SIM only deals. If you are comparing providers, let your child see that or openly talk about it at the dinner table. It shows your children that you are actively following the lessons you are trying to teach.
It can also help to show your children how you are actively trying to save money in the real world. For example, you can encourage your child to pick up cheaper items to save you money on your food bill when grocery shopping. It keeps the conversation around money open and teaches them subtle lessons along the way that they will no doubt pick up themselves.
Teach Them How To Budget
As well as setting savings goals, it is vital that your child understands how they can reach them. Therefore, it would help if you could teach them how to budget. There are plenty of budgeting apps that both you and your child can explore, and the best part is they are often free to download. Show your children how you split your budget each month between essential items.
Allowing your children to use budgeting apps also teaches them to track their spending. Your children will quickly understand that they need to plan their finances to successfully maintain a balanced budget. Conduct some research into the budgeting apps currently available to you. Whether you have a tablet, smartphone, or android, there are plenty that your children can use to help them become better financial planners in the future.
About the Author
Lucy Hudson is a lifestyle writer who loves to share her knowledge and tips for savvy parents looking to save themselves time, effort, and money.