How To Teach Your Kids How To Save Money
One thing that I want to talk about that may seem very obvious is how to teach your kids to save money. I talked about how important it is to teach your kids about money, to give them an allowance, and to open a bank account for them. Now, I want to talk about concrete steps on how to teach and encourage your kids to save money.
The Act Of Saving Is The Backbone Of Any Financial Education
The whole idea of financially educating our kids is to prepare them for the future. Teaching your kids how to (and why they should) save is the most important part of any financial education.
After all, smart saving is the core idea of financial savviness. We teach our kids to save the right way so that they can have a comfortable future. The idea is that we teach our kids not only how to save money but also why they should save money.
As parents, it's our responsibility to guide them and help them. I want to help you do so by giving you some simple, practical guidelines.
4 Easy Tips On How To Teach Your Kids How To Save Money -- The Smart Way
1. Write down your kids' savings goals!
As I have mentioned before, kids learn more easily when things are concrete and not too abstract. This means that they retain things better when they are visible. Writing down their savings goals is a simple way to take advantage of this.
For example: your child wants to buy a £30 toy. You can print a savings sheet that your child can cross off or draw on every time he/she puts money towards that goal. That way, they see their little efforts adding up towards their savings goal!
There's no better way to keep a kid at it than through constant positive reinforcement. And what better way to positively reinforce your children’s behaviour than by letting them see their goal getting closer.
2. Use separate savings jars or a KinderCash piggy bank
A simple explanation of saving is putting money aside for future use. But smart saving is also making sure that you are teaching your kids the different uses of money.
When teaching your kids how to save smartly, you need to explain how to allocate their funds. You have the opportunity to introduce the following 4 categories:
- Money to spend: money for something small you’d like to buy in the near future
- Money to save: money you’d like to set aside for now, to buy something more costly later on
- Money to invest: money you really want to keep for much later on in life (e.g. for your studies or for a house) and that you can “put to work” in the meanwhile
- Money to donate: money you’d like to spend for a good cause that is important to you.
Each category should have its own jar or section in a piggy bank with multiple slots. I recommend the KinderCash because it's a piggy bank that does exactly this - which I think is quite brilliant indeed.
It's important that kids begin to separate their savings into different categories. It makes it easier for them to make sure that their money has a purpose. A tangible meaning associated with money makes it easier to learn why saving is important for those goals to come to life.
3. Let your kids count their savings on their own
Another way to take advantage of your kids' need for concrete hands-on money moments, is to let them count their savings on their own.
When their savings jar or piggy bank is filling up, let them count the money they've set aside. This lets them own their accomplishment: being able to save money for a specific goal. Once they know the feeling of how amazing it is to be able to set aside the amount they counted -- they'll be encouraged to keep on doing it!.
4. Set good examples!
This is definitely the most important step that you, as parents, can take. The best way for kids to learn how to save smart is if they see adults around them do so, too. Often we don’t make these money moments visible to our children. So we warmly encourage you to do so.
As your kids' role models, it's your job to make sure that you set good examples for them to follow. If your kids don’t see taht you are saving, they won’t know that you certainly are. Keep your own savings and spending jars near those of your kids, and show them that you too are putting in your pennies, that you later bring to the bank. If they see that you are walking the walk and talking the talk, then your kids will be encouraged to follow. As parents, we should always act and practice the things we are teaching them.
Prepare Your Kids For Their Future -- The Smart Way
Here at A Smart Way To Start, we want to make sure that our kids are not only putting aside money for the sake of saving. We also want our kids to grow up living a conscious and fruitful life.
We aim to teach kids that money is an expression of values and share practices that will help them become savvy and forward-thinking adults. We hope that all kids may become responsible stewards of the planet.
If you want to receive more tips and ideas on how to talk about money with kids The Smart Way, join our Monthly Money Tips newsletter.
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