5 Tips to Teach Your Child to Save Money

5 Tips to Teach Your Child to Save Money

As your child grows, there are certain healthy habits you need to teach them as their parent to grow into responsible adults and have a better future. 

One such habit is saving money. 

When you teach your child to save, you introduce them to a life-saving skill that can build a solid financial future for them.

An effective way to teach your child saving skills is to be an example for them. 

How we think and act as humans are shaped by what we are exposed to at a younger age. 

Children pay attention to people around them and can emulate their behaviors.

If you want your child to have a good relationship with money, set a good example they can follow.

Also, it is necessary to teach your child to differentiate between their wants and needs. 

Explain what basic necessities and wants are with specific examples around your home so they can easily catch up.

Similarly, you can start teaching them about healthy spending habits at a much younger age and gradually raise the bar as they grow older. 

Whatever practices you imbibe in your kids at an early age will be more helpful when they grow older; thus, you should never stop upgrading your teachings.

Consider this overview to learn helpful ways you can teach your child to save:

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Explain the Difference Between Wants and Needs 

It is essential to spell out the difference between necessities and wants to teach your child to save appropriately. 

This way, they learn to adjust their spending habits to prioritize their needs before their wants.

Start with giving them a definition of what wants and needs are. 

Make sure it is simple and understandable. 

You can then process to illustrate your definition with examples around the house to reinforce their understanding.

Also, you can set a quiz for them to take. 

You can print out colorful images and drawings to make it fun and exciting as children might lose interest when it gets boring.

After scoring your child, be easy on their mistakes and correct them lovingly. 

You can also give them candies as a reward for getting some answers right.

To efficiently teach your kids about needs and wants, ensure they understand contentment. 

The habit of being contended is beyond pen and paper. 

You must show them daily how to be content with what they have.

Be a Good Example 

Suppose you tend to spend regularly on your wants; you will unintentionally teach your child it is alright to do so too.

To teach your child to save, exemplify how you can prioritize your needs and put asides personal wants to have money left to save.

As an adult, do you have money saved for retirement, emergency funds, health, or family vacations?

It is essential to set your saving habit in order before you can adequately explain to your child what saving is.

Also, if you shy away from money talk at home because they make you uncomfortable, you won't be able to teach your child healthy spending habits properly. 

Practice healthy communication about money at home.

Similarly, you can share your savings plans with your child. 

If you want to save for a new fridge or carpet, involve your child in your savings plan. 

Let them know the percentage of your income you are setting aside and how long it will take. 

They better understand what it is to save when they see it in reality.

Teach Them About Intentional Spending 

Intentional spending is not always easy to do. 

Even as adults, it is possible to deviate from the spending plans to buy things impulsively. 

However, deliberate spending is a habit you need to emphasize when you teach your child to save.

If they get pocket money, encourage your child to write down their daily purchases to track what they spend money on. 

This experience will help them gain insights into their spending pattern and make wise spending decisions.

Make a list of items to be purchased when visiting the grocery store with your child, and endeavor not to buy anything outside that list.

Continuously doing this in their presence will teach them the importance of planning ahead and sticking to it.

Similarly, you can show them different ways to track their purchases themselves.

It is essential to be theoretical, but it is more efficient when you show them practical ways to carry out your teachings. 

They can use an app to track their expenses or use the old-fashioned way of writing them down.

Give Them the Means to Save

For the younger ones, you can get a savings jar where they can keep their saved coins or cash. 

Use your chosen means to explain to your child how money grows when they save consistently. 

To teach your child to save, give them the means to save, and kickstart them on their saving journey.

You can use a transparent saving jar so they can see their money grow.

Question your child about their goal and what they would like to save for. 

Seeing their money grow gives them a sense of accomplishment and confidence in being able to do whatever they set their mind to.

You can also give them a certain amount of interest after reaching a quarter of their saving goal. 

Giving your child incentives will keep them motivated and focused on completing their saving plan.

Similarly, you can get a visual reminder if your kid decides to save for a toy. 

Put a picture of their desired item to motivate them to reach their goal.

It is also essential that they know how long they will save, as kids get easily frustrated when the plan doesn't come to an end.

Gradually Raise the Bar

When your kids are younger, you can teach them about spending, saving, and money habits simply and uncomplicated. 

However, their interest and need for money will increase as they age. So, gradually raise the bar when you teach your child to save.

Start teaching your kids healthy money relationships at an early stage.

Explain the relationship between work and money at a young age. 

Kids should know money doesn't fall from trees but from hard work. 

To buttress your point, have them do a chore in the house and pay them for it.

When your child starts earning from their hard work, they understand the concept of money and hard work better and make wise decisions.

As they grow older into teens, it is important to teach comprehensively about savings, credits, interests, and loans. 

You can encourage them to aim higher and save for bigger things like college or a car. 

Also, let them know their spending and saving decisions at that age can affect their financial freedom in the future.

Conclusion

As a parent teaching your child to save, you instill in them good financial habits, the importance of planning, self-reliance, and excellent decision-making skills, and help them understand the value of money.

To efficiently teach your child, explain the difference between wants and needs, be a good example they can emulate, teach them about intentional spending, give them the means to save, and gradually raise the bar as they grow older.

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September 27th, 2022

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