Now that kids are at home owing to the pandemic situation covid-19, also known as coronavirus. Even as they play and engage in other fun activities at home, as their parent, you are duty-bound to engage them in series of learning in which financial literacy is one of them. Saving is one habit we have to build, no one was born with it. Even some adults are yet to master that habit. This should then tell you that the sooner you start to teach your children about saving, the better. According to a research titled ‘Habit Formation and Learning in Young Children’, it was discussed that children should be able to recognize the value of money by the age of 7. This means delaying until the child finishes secondary school before teaching this can be too late. Lots of bad habits might have been picked up, and it might be hard to take those habits away by then. Then it all boils down to ‘how do you make your children interested?’ Kids do not learn the same way adults do, they need to be engaged in interesting ways for the learning to be impactful. With that in mind, here are 7 tips to help teach your kids how to save money;
1. Let them work for their money
By making them work for their money, they can understand its value and why they must save so they will not lack. There are two major ways they can work for their money;
- The first is by giving them a commission for extra chores they do in the house. Like mowing the lawn, taking out the trash, or even washing the car.
- For teenagers that are of age, they can seek for paying jobs to do during their long holidays rather than just sitting at home.
2. Teach them the difference between Needs and Wants
Even as children, I am sure they know that everything they enjoy is gotten with money; the food they eat, the clothes they wear, their toys, their games, etc. to them, all these things should be given to them once they ask, but as their parent, you know what is necessary and what is not. You can say needs include their food, clothes, and house, while wants are extras like games. When you do this, let them know that importance should be placed on what they need and not want they want.
3. Work with a Goal
When you tell your son, “I want you to save #200 daily”, the next thing you will hear is this “what for?” this is where the goal-setting comes in. With the goal, they are better motivated to save. For a girl child, you can tell her to save for buying that doll she has always wanted. Also, for the boy, saving to buy that game would be a better motivation.
4. Create where to save
Once the goal has been set, the next thing is to create where to keep the money. Piggy banks and glass jars are better options for kids, while those up to the age of owning a bank account can have a savings account at the bank. For kids that are using a glass jar, they can see how their money is growing.
5. Let them learn from their mistakes
The reason you even want to teach your kids about saving is so they can learn themselves. As tempting as it can be to also tell them what to do, it is better you let them learn from their own mistakes. In that way, they will know what to do with their money.
6. Motivate them
Are you having a problem with your child saving? You can motivate such a child to save by giving a percentage of their savings at the end of the week or month. For example, if your child weekly saving goal is #1000 per week, you can offer to add 10% if they reach their goal.
7. Be their role model
Practice what you preach. There is nothing bad about letting your kids know about your savings plan as well. With this, you should be watchful of how you spend, be a good example for your kids because what you do is what they will likely emulate when they grow up.
Financial literacy should be learned by everybody; both young and old. For parents that want their children to develop this habit, make saving a regular part as this would stand to be the foundation for their secure financial future. The 7 tips explained above would be good for a start.
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