In as much as adults keep struggling every day with the concept of money management, in schools, nobody teaches your children the importance of saving money.
This article will show you 5 ways to teach your kids or yourself about saving money.
Start With Wages:
Giving allowances to young children without requiring them to work for it, only teaches them to be entitled. But, if you pay them wages for age-appropriate errands, then they start learning the value of a dollar. Be sure to allocate the same amount of work for the same pay rate. Also, you can tell them to give you weekly reports on how they spent their wages.
A Piggy Bank:
The concept of the piggy bank is using a container, sometimes in the shape of a pig to save money. Instruct your kids to aim at filling up the piggy bank with whatever currency you use until there is no more room left. They must also understand that the reason for saving money in the piggy bank is for the future. To buy a toy, book or to invest. And that the more they save, the more their money grows.
Open a Bank Account:
As soon as the piggy bank is full, take your kid to a traditional bank. Have them open a savings account, save their piggy bank money in order to gain interest over time. This way, the kid will get the motivation to save more, knowing that if he/she doesn’t touch the money, it still grows due to interest factor.
Use Verbal Encouragement:
Since you are educating your child on the importance of money, then give them praise every time your child makes a deposit in their piggy bank or savings account. Also, help your kid make smart financial decisions by explaining the sense of deprivation that comes from spending all of their money on little purchases – like candy – instead of saving up buy a stock, just like Warren Buffett did when he was only 11 years old and now he is the greatest money maker alive.
Lead By Example:
Children learn from their environment, what they see, hear and experience starting as soon as they are born. Now as a parent, you want to make sure you take full advantage of this early stage of their lives to teach them the basics of money in practical situations. For example, explain why you buy at certain stores, how and why you are saving for a new house etc.
According to UNICEF, between 0 to 8 years of age, is critical for the cognitive, social, emotional and physical development of a child, meaning what you teach your kid is very crucial and your responsibility. Goodluck!
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