How to teach a child about saving?
Jayne Pearl, author of Kids and Money says: "One day, my three-year-old son said to me when I told him that I couldn't buy him a toy he wanted: 'Go to the bank and they will give you money.' I realized it was time to explain to him where the money was coming from."
Let's take a look at her tips on how you can easily help a child up to the age of 10 understand the world of finance and bring them closer to saving.
Money doesn't grow on trees
When children see money coming out of an ATM, they don't realize that money is not unlimited. Explain to them that you work every day to make money and that it is a bank is just a place where money is safe.
Working with your budget
The best way to teach children how to manage money is to give them some. If they spend their money on a new toy and don't have enough for something else they want, that's actually a good thing. They learn firsthand the consequences of overspending.
Good things come to those who wait
Teaching children how to wait for gratification can help prevent a "buy now, pay later" mentality that could lead them into credit card debt later on. As much as possible, reinforce the idea that waiting pays off. For example, make a pizza together with all the ingredients your child likes. For comparison, there is also frozen and pre-prepared pizza. Homemade pizza takes more effort and time to prepare, but the taste is incomparably better.
Don't spend as soon as you get it
Limiting impulse purchases goes hand in hand with teaching children how to wait for gratification. Show them by example. Before you go shopping, create a budget. Write down what you're going to buy, which stores you're going to, and the price range for each item. You then compare prices online and use any coupons that are available. He will learn that he is planning purchases before actually shopping is beneficial.
Saving is cool
Does your child want a new toy that they don't have enough money for? Tell him to save! When he saves enough money, take him shopping and let him pay the cashier. He will never forget how good it feels to work towards a goal and be rewarded at the end.
Let him follow the money
We teach the child that you are he writes down how he spends his money and thus tracks his spending. This is a big step forward in your child's money management skills. Let him use the computer and write down and monitor the use of his money. You can also create a folder for me to store the invoices.
Wish list
It is difficult for children to set their priorities, so let them make a wish list with your help. So plan what the child wants to do with his money. Then help them sort through the list by talking about what is important about each wish.
Saving ways
Show him the interest, how they can earn money by saving in the bank.
Be an example to your child
Emphasize values such as diligence and a responsible attitude towards money. Also explain to them the difference between need and want. Is it really necessary to have everything that is current at the moment?
Learn to share it with others
Let your child give part of your money to charity. Teach them that money can be used to help people, not just to buy things. Remind them that it's not just about how much you give, but that every little bit counts.
