Teaching your child to put aside money for a rainy day should be one of the key learning’s in your child’s development. This is something a parent should instill in their child from an early age and the financial lessons learnt have the potential to affect the life of your son or daughter for many years to come. Below are some of the most effective ways you can teach your child to save money.
Set a Good Example
Parents have much more influence over their children than they often realise. If you save on a regular basis, make sure your child is aware of this. They should also be aware of the benefits of saving. This is easily achieved by showing them what can be done with the money you save up over time.
For example, if you decide to put money aside for a holiday or you want to buy an expensive item, show your child the process behind saving the money to make these purchases, so that they understand what’s involved. Putting away money for a rainy day is also an important lesson you should teach your child.
Create a Goal Chart for Savings
When it comes to saving, setting goals is one of the most effective ways to keep focussed and disciplined. A goal chart that allows your child to set weekly, monthly and annual financial goals makes it much easier to visualise what your child wants to achieve when they are setting aside their money. This exercise also allows your child to prioritise their spending.
Make Saving Money a Fun and Interesting Activity
Talking about money and finance to your child is not always the most exciting topic to discuss with younger members of the family. This is why it’s important to add a fun element to the proceedings. You could involve them in financial decisions that affect the whole family, which makes this activity more interesting.
They also get to feel a certain responsibility that can affect other members of the family too. For example, you could allow your child to help you with the weekly shopping budget, so that they understand how to use a fixed budget wisely and will understand the value of money more.
Open a Savings Account
Many kids start off saving money at home in a piggy bank or a jar. However, it’s often too easy to access these savings, so you should encourage your child to make a habit of depositing their money in a local credit union, bank or post office account.
Reward Your Child
Some kids need an incentive to save their money. Agreeing to reward your child each time they save some money will give your child the incentive they need to keep doing this. The reward could be financial, where you decide to add to the money your child puts away or you could reward them with some other treat.
Teaching your child to regularly save their money is one of the most important habits you can pass on to your son or daughter. The tips above are just some of the most effective ways to do this and have the potential to have a positive influence on your child’s future and the way they deal with the financial aspects of their lives.