Learning financial management is an important skill that every child will eventually learn sometime in their life. Teaching them to save from a young age will make them feel familiar to the process of managing their accounts and being responsible for the savings they have. Parents have a responsibility to teach their children about these crucial skills so that they can grow up to be responsible adults who are able to make smart decisions on their own. Here are some ways that you can teach your kids to be savers, not spenders.
1. Set a Good Example
Children are like sponges—they absorb all what is around them. A home is a child’s first institution, and they learn what they see and observe around the house. If you happen to be a prudent spender and refrain from making bad financial choices, your children will automatically learn that from you and will do so without having you to sit them down and teach them to. Similarly, if you make bad financial decisions, that is exactly what your children will learn.
2. Open a Savings Account for your Children
Every child loves to feel like an adult. Opening a kid’s bank account is a great way to make them feel all “grown up” while teaching them the basics of financial management.
3. Reward Your Children for Saving Money
Offer small rewards as incentives for your children to save money. When they see that they are getting something out of it, they will be more likely to save in order to achieve that reward.
4. Make It a Game
Make savings a fun thing to do. Motivate your kids by making colorful goal charts that show how much money they have saved and how many milestones they have achieved. This way, your child will look forward to save money and feel glad when they have “leveled up” to another milestone.
5. Use Creativity
You can use creative methods to encourage children to save money. For example, if your child wants a new toy, you can assign a jar or envelope to them in which they will save the money that is required to buy that toy. The child can draw and/or write what they want on the envelope or jar.
Apart from teaching your kids to be savers, this method will also teach them patience, and the fact that sometimes it takes time to achieve what you need.
6. Let Your Child Make Mistakes
If you realize that your child is making a bad financial decision, guide them that it is not profitable, but if they insist, let them make the mistake. When they suffer the consequences, gently teach them where they went wrong. This way, they will make sure never to make the same mistake again.
7. Look Out for Good Deals
Today, it is very easy to purchase online, and get some good deals on purchases. For example, if you are about to buy a kid’s pool, instead of buying a brand new one, you can look up for used ones or the ones available in a different brand which gives a better deal. Sit with your kids and let them in with the discussion of which choice will make the best deal.
8. Help Your Children to Prioritize
You need to teach your child the importance of long-term planning. Have them make a list of things they want, and then ask them to prioritize. This way, they will learn to decide which items to spend money on, and which items to wait for.…
The carefree days of teens are not when you worry yourself sick with money matters. However, before hitting your twenties is actually the time to learn about money, a lot more than spending it on all you wish to fill your closets with. The money lessons are ought to be taught at a tender age so not only to induce saving habits but also to garner a culture of smart spending.
Here is what you need to know about money before turning 20:
If you think it is alright to put it off for the time when you’d be completely financially independent, it is high time you ditch the theory. Before you hit your twenties and start minting money from a serious job, you need to know how to spend it and when not to. For that matter, a budget preparation always helps and has to be a learned skill, do so with your weekly or monthly allowance if you aren’t earning yet.
2) Credit cards aren’t magic cards
The very concept of absence of immediate responsibility which comes with the use of a credit card has to be something taken seriously, especially for the young adults before their twenties. However, it is often advised, and very rightly so, that credit cards shouldn’t be handed over to teens unless it is absolutely necessary. The concept of buying with less or no worry to pay later is something detrimental when it comes to learning about money in early years.
3) It is important to learn basic concepts of banking
Almost all of the banks offer accounts for teenagers and that is one tool to use to learn about basic banking principles. The idea is to learn about the significance of money and about the regulations and restrictions implied by financial institutions which one has to understand anyhow.
4) Saving always helps
No matter how tempting it is to take charge of all your money at once and spend it on all what you want without the mere consideration of consulting an adult; it is a way better idea to save it. Saving, undoubtedly, works in the long run whether you need to pay for your college tuition or any other emergency need arising, safely stashed away money helps in various manners. It is something you need to know the earlier the better, so your twenties isn’t the time you are only experimenting with finances.
5) Differentiate between needs and wants
It is highly important for teens to get to grasp the concept and difference between needs and wants and act in accordance to the same when it comes to their spending habits they are in check by themselves since as young age.
The idea is not to turn your young adults into miserly people but to make sure they know where they are spending the hard-earned money and to help them make smart decisions and learn about the various types of spending habits and their outcomes. It is also essential for people to learn before their twenties about browsing their investment options and know what serious stuff they could do with their money.…