How to Teach Your Children to Save for a Rainy Day
Instilling the discipline of savings to our children is an important investment that every parent should place on their kids. Psychologists tell us that what children learn in their formidable years stays with them through out their lives. Therefore, by teaching your children how to save, you ensure that they become good financial planners when they grow up. Children are fast learners and teaching them how to save is a simple task.
Help Them to Set Goals
Children easily learn to save once they have a saving goal. As opposed to purchasing everything your children ask for, you should train them to save up for such things. This way, the motivation of having what they want will keep them actively saving. Sit with your children and set goals for purchasing things that they want through savings. You can set up a schedule that shows the price of the item against the accumulated savings. This way, your child or children can picture the distance covered and the distance left. Have short term goals to begin with so as to encourage the child to save more for larger items in the future. You can also have a picture of the item to be purchased to continually give your child or children a visual image of the item and therefore continue motivating the child to save.
Encourage Them to Save From Their Allowance
If you give your child or children an allowance, you should always encourage them to save 10% of the allowance. This way, your children will not only learn the discipline of saving a porting of their income but they will also accumulate funds which will be a head start for them once they get independent.
Open A Bank Account With Them
Opening a children bank account with them will help them understand the banking process at an early stage in their lives. Banks play an important part of our finances and it is important that children get to learn this an early stage. Furthermore, the ledgers given by the bank will help them in tracking their savings and encourage them in their saving discipline.
Teach Them to Spend What They Can Afford
It is important that you teach your child or children to spend on only what they can afford. This will protect them from getting into the credit card trap. You should help your children to consciously match their needs to what they can afford. If an item is too expensive for the funds that they have at the moment, you can teach them how to save up to afford or how to select cheaper alternatives for the same item.
Encourage Them By Matching Their Savings
Another way of encouraging your child or children to save up is by matching their savings contribution. You can have them save for half the cost of the items they want to buy and you can contribute the other half. This way, they can be encouraged to save more since the matching amount will also be more.
Be a Good Example to Your Children
Besides teaching them how to save, it is important that you become a good example to your children. Children learn more from what they observe. So, let your child or children know that you are saving up to purchase an item and that you cannot afford everything. Show them that you also opt for cheaper alternatives when unable to afford items. Living by example will have a greater impact in training your children on this important subject of saving.
