Teach Kids to Save Money

Show them the Habit

Saving money is a skill that does not come easily to many individuals. Whether you are young or old, learning to save money can be an equally challenging task at all times. However, studies have revealed if taught at an early age most children grow up learning to save money and therefore are more successful in managing the essentials as it deals with money. Saving money is as important as earning it and the onus lie on parents on how to teach their children to save money. 

A child that sees the parents blowing money and not saving are more apt to do the same when they grow older. Most parents find this quite a difficult task and do not know how long will they take to see their child starting to reap the efforts of his own savings.  Still practically every parent has this desire to see his or her child learn this healthy habit.  This will be great blessing to him or her in the future. Teaching him ways to save money is a valuable lesson he will hopefully not forget. Kids saving moneyCredit: www.payjr.com

Children normally need to be motivated in everything they do and especially when it comes to learning a new task. They are even more reluctant to do it until and unless they do not see anything beneficial in it. Hence, the parents have to encourage their children to save money by teaching them how it would benefit them. Teaching money to kids can be valuable to you as well.  

Children normally have an uncanny knack of spending all that they have either on perishable things like sodas, candies, maybe even ice creams or on things or gadgets that give them short lived joy.  This can include such things as toys, video games, and etc. In such a scenario parents have to provide a strong motivation to their children and encourage them to save money to buy something that is more beneficial to them. What ever this “more beneficial” item is will be unique to the particular child in question. This may seem impossible at first but certainly it is achievable.  

A child always wants to be one up compared to the others and this is what you can capitalize on while teaching them.  Show them how long term goals, even though they are difficult to achieve, are more long lasting as compared to short term goals.

Show them the Motivation

Once you make your child understand that thinking long term is good for them then you have put him or her on the right track towards saving money. Ask your child to list out all the expensive toys or games that he or she would like to purchase and then ask them to draw pictures of them on sheets of paper mentioning the price underneath each drawing. You can also have them get pictures of the items they want and glue them on a sheet of paper or place them in a folder. Once done with this at the sides of every sheet ask the child to draw an object that will help them measure their achievements.  You can use a thermometer or a pie chart, which show them how far they have reached in saving enough money to buy a particular thing. Piggy BankCredit: lerablog.or

After finishing the drawings paste each of the drawings in your child's room in an order starting from the least expensive to the most expensive. If you choose to put them in a folder you can do so as well.  Now place a piggy bank on the table of the room and start asking the child to put in the money in the piggy bank.  As they gain money in the piggy bank then they should update the corresponding chart as to how much money he or she has saved toward that particular object and how much is still remaining. This will help your child track his or her progress and also by being aware of the amount remaining come down, it will start to motivate them to save more.

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Let them Know you will Help

Now the next step to motivate them further is to give them a particular bonus reward.  For example, in a week, if the child reaches a certain target then he or she gets an additional 25% of the amount or in some cases 50%. This will be up to you and your situation, depending on how much you can afford.  This will keep the child focused and start getting him to cut down his expenditures on things which are not important. Help them save MoneyCredit: www.quizzle.com

In order to make the process more realistic and interesting as well, you can have an additional piggy bank next to your child's piggy bank where you can put in the said bonus amount at the start of the week and when the week ends. The target is achieved for a said amount of money then you can transfer the corresponding bonus amount from this bonus piggy bank to your child's piggy bank. This will kind of give the child a feeling of assurance and may convince him or her that you are really serious about your words. Studies have always indicated that children normally find it difficult to believe their parents when the deal is just too good. This may not only be true for children but for adults as well. Therefore, this small action of yours can get the child serious with his task as well.

Meeting the Goal

Collecting the Reward

Once a requisite amount is reached for a particular toy or desire then you can give the child an option either to buy it or to sacrifice it for the next thing that is even better. If in the instance your child chooses to go for the first object then remove the picture and display the real object in the room at a time you can get it.  If they decide to go for the next object just let the picture be there and you can strike it out. This ongoing cycle will definitely motivate your child to save more money and in the long run he or she will benefit from it.Financial Education is the rewardCredit: www.moneyreasons.com

Remember the only motivation is what works for a child in order to learn the habit of saving money is within them. Therefore always encourage your child to save money and once learned it is habit he or she will not forget for life. That is the best reward they will ever recieve.