Parenting is hard work. You know that life can be tough so you try to teach your children as much as you can, so they are ready for whatever life throws at them.
Instill Good Habits
You teach them to be grateful, honest, patient, and kind. You teach them good hygiene, proper manners, and strong social skills. You stress the importance of learning to read, write, and develop good study habits. Among all the good habits you teach them, have you included the habit of saving money?
Make Saving Money Tops
Not enough emphasis is usually put on teaching the importance of saving money because after all, what does a child have to save money for? Groceries, mortgage payments, retirement plan contributions? No, of course not. But, if you are teaching your children good strong skills and habits to get them ready for life, learning how to save money at an early age should be included. Teaching your children the basic habit of saving might help them avoid some financial hardships in the future. Many adults who are buried in debt and living from paycheck to paycheck nowadays wish they had learned how to save money—an emergency fund would come in handy right about now.
Teach Basic Money Management
When I got my first job—making minimum wage—my Dad strongly suggested that I save one half of my paycheck. I explained to him that as a teenager that was just impossible…I needed my entire check to buy all the things teens buy. Being the wise parent that he was, he explained that in the long run, learning to live on half and saving the other half would teach me the basics of money management. Was he trying to make me rich? No, he was trying to teach me the habit of saving. As a teen, I had no interest in “money management”, but I trusted my Dad and followed his advice.
Here are a few tips you can use to teach your children the habit that will last them a lifetime—the habit of saving money.
1. Allowances
Allowances can help them see the value of money received for effort put out—a great start. The key is to tie the allowance into chores. That way they can also learn how to be accountable.
2. Delayed Gratification
You will do your children the biggest favor of all if you can teach them to delay the gratification that comes from buying something. Impulse shopping, buying on a whim, autopilot spending all mean the same thing—buying stuff without thinking. Someday when your children start making their own financial decisions, if they are tuned into this habit, it will be a blessing.
3. Consequences
Explain to them the consequences of their buying decisions. For example, if they buy this toy, they will not be able to afford this toy.
4. Free Money
If they are old enough to have a job, make them an offer to match the amount of money they deposit. If they are not working yet, maybe you could match the amount of money from their allowance that they deposit. A little incentive can go a long way.
5. Action Plan
If they are working, have them start a budget. This way they will start to understand how important it is to have a plan for their money. There are numerous budgeting apps available.
You want the best for your children. Teaching them the basics about saving money will give them a financial head start. It will help them manage their money better in the long run. This will take some time and effort on your part, but it will be worth it.