How to Teach Your Child to Save Money

father and daughter

Teaching your children how to save money is probably one of the most important lessons they can benefit from. Not only will they realise the value of money, but you will also help them accumulate wealth and gain a better future.

Saving money is a great habit, but it takes time to build. Even some adults need to master this essential skill. No matter how young or old your child is, there’s no better time to start your children’s training than the present.

In fact, the earlier they can do so, the better. The good money habits they will develop can last well into adulthood and lead to a lifetime of smart financial choices. But if you’re unsure about how to go about this, don’t fret.

There are many simple and even fun ways you can do to teach your kids how to be financially responsible. Just remember, if you don’t take the initiative of teaching them now, they will learn how to manage their finances from somebody else. And that’s not a chance you’d want to take.

Use a transparent jar.

Typically, we get our children a simple piggy bank as a place to store money. However, it’s more compelling to see how much money they will have saved over time. If you can’t find a clear piggy bank, just use a transparent jar. When they see their money grow, it will motivate them to save even more.

Explain wants versus needs.

You may think that your children are too young to grasp the difference between wants versus needs. However, you may be surprised to learn that kids as young as three can already start to understand the concept of money.

Take the time to talk to them and discuss your family’s basic needs like food, water clothing, and shelter. Explain to them that there are some things you can live without, that they don’t always have to own the newest and greatest toys or video games.

Set a good example.

Studies show that children start forming their money habits as young as seven years old. As a parent, it’s your responsibility to set a good example. So, always be aware of your own spending habits because your kids are watching, and they will eventually notice how you handle your finances.

Teach them to wait before making a purchase.

Even adults can learn from this tip. While it may be hard for young kids to learn patience and restraint, many grown-ups even have a difficult time following this rule, too. However, when your children can learn how to delay gratification, it will be easier for them to avoid making purchases out of impulse as they grow into adulthood.

Teach them how to be content.

As your children grow older, they will be exposed to things that other kids may have, especially when they start using social media. Your kids might see things like a new smartphone or a new, trendy pair of shoes, that their friends may have and think that they should have those, too.

So, teach them to be content with what they have. Their friends may have the latest iPhone, but you can tell them, “Hey, your phone may be a bit old, but it still works fine,” and the money they save can be used to fund more important things, like their college education or buying their own car when they are old enough.

These are just ways you can teach your children how to save money. As parents, it’s our job to guide them and help them build a bright future. Hopefully, these simple tips will be enough to get them started on the right path.

More from Alpha Car Finance blog: