It’s never too early to start teaching children about money. From playing shop, to earning their first dollars doing chores around the house, children start to form money habits from an early age. In fact, children should be able to understand the concept of an allowance by the age of six.
So, why not have them sponge up smart money-management lessons from early on? Teaching your kids to save money can help them develop good spending habits early so they’re better able to set up a financially stable future. Then, they can really start to invest in their piggy bank!
If you’re looking for places to start, put these exercises into practice and start teaching your kids to save today.
Put Saving into Practice
You can’t save money without an income, and you can’t have an income without working! If you haven’t already set up a pocket money system with your kids, put together one that offers a weekly paycheque for completing a few simple chores around the house. Your kids can then start to put money in their piggy bank, and start to understand what it means to save money. You can even divide their money into three categories: spend, save and give. This teaches them to be responsible with their money.
It’s up to you whether you use physical cash, set up a bank account for them, or use both. And if you really want to encourage them to work hard and earn more, offer them a reward for going the extra mile (e.g., spraying air freshener after dusting).
Build Goals (and the Piggy Bank!) Together
Now that your kids have money, they might not yet know exactly what they can do with it. A $10 note could get them a small toy, but a dozen $10 notes (after a few weeks of saving) could get them something much bigger.
Sit down with them and talk about the things they might want to save up for. It could be a ticket to a theme park, a new video game or new sneakers. It’s a fun conversation to have. Get excited with them about the possibilities and map out a savings timeline to show them when they can afford these awesome things. Having a clear goal in mind is one of the best ways to save money for kids.
Lead by Example
Teaching your kids to save money is a long process made up of lots of little lessons – and a lot of the time they’ll learn from their mistakes. But a big lesson you can do today is to share your family budget and savings goals with them. Explain the necessary costs (e.g., weekly groceries, rent/mortgage repayments, health insurance) and show them how you put aside your dedicated savings. And explain why. Are you saving up for a family holiday or a new car? Or maybe you want to have money kept aside in case of an emergency.
Shopping for Lessons
It can be a hard thing explaining to your kids why you can’t buy everything they pick up at the shops. So, why not put them in your shoes? Get your kids involved in making your next grocery list. Talk about the budget and then, when you’re at the store, ask for their help to find discounts and affordable options for everything.
If you want to know how to teach your children to save money and keep them busy at the shops, this is a great activity. It also communicates why you can’t always buy new toys or the yummiest snacks.
The best money-saving examples are ones that are real and relevant. But you’ll have to put what you say into practice too. That could mean telling them how much you want to buy that cheesecake, but you’d rather save more for the next family trip.
For more money-saving tips, check out the Cigno blog.
Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.