We teach our children good habits, what kind of company to keep, spiritual practices like praying and believing in themselves but hardly teach them good money saving habits. After all, our children should also know how to value, save, spend and manage money.
The money saving habits children develop when they are young can be of great significance in shaping their financial future. The sooner you start teaching money saving habits / lessons to your children, the better for them. The financial behaviour of children is most influenced by their parents. As a parent, it is up to you what kind of financial behaviour you build in your children.
Here are some important money saving lessons you can teach your children:
Going to market always doesn’t mean you (child) will buy something
If you have come to a mall to buy a birthday gift for your child’s friend or for someone else, make sure you make it clear to your child that we have come to buy a gift for someone. And it doesn’t mean you will also buy something for yourself. This way your child would learn that going to a mall or market always doesn’t mean they are going to shop for themselves
Sometimes you need to wait to shop something you desire
This is quite a hard lesson for children to learn but it is worth it. As parents, you should not gratify your children whenever they want to buy. At times, you need to tell your children to wait till the time they themselves save the money to buy what they want. This is how they will learn the value of things and the lesson of saving. They will learn that at times they need to earn the things they want.Make three boxes with the labels “Saving”, “Spending” and “Sharing”. Whenever your child gets money whether for his birthday or for accomplishing some chores etc., divide the money equally among three boxes. And later have your child spend for smalls buys like chocolate, fruit juice, etc. Sharing because money can be used for a needy person you know or for some charity. The saving box money can be used for buying expensive things.
Make a goal for your child
Have your child make a goal, like buying a toy. But make sure it is not so expensive that it looks impossible to achieve by your child through his savings. The goal should be such that it can be achieved within few months as it will keep your child excited and hopeful about achieving it. And then plan the tasks for him to help him reach his goal in a reasonable timeframe.
Borrowing is more expensive than saving
Many parents are quick to use their credit cards for shopping when they even know that they can’t afford. And many people are in credit card debt. If as parents you keep doing this in front of your children, they will think it is a good practice to use credit card all the time even when you don’t have enough money in your bank account. So, just teaching them how to use the credit card is not enough but tell them how expensive borrowing can be.
Next time when your child wants to purchase a toy or something else and he does not have money to buy, lend him money but ask him to return it with interest. This way he will learn that borrowing is expensive.
Not to be envious of your friend’s money
Teach your child that his friend’s money is none of his business. Just because your child’s friend has a lot of money to spend, you run into debts keeping in pace with them. As parents, you should never let yourself feel pressurized and spend more on your child just to match the spending habits of your child’s friend. Teach your children to spend wisely and mind their own finances.
Teaching your child good money saving habits is one of the best gifts you can give to them that will stay with them forever.