Saving is a key principle. This is what MyMoney.gov has to say about this financial habit. The government website believes this to be one of the 5 important money principles that will help make a consumer financially stable.
While this habit is something that you need to start doing on your own, you need to make this a family effort – especially when you have children. Just like you need to include everyone in your budgeting efforts, you also have to make everyone contribute to your saving goals.
Encourage your child to save
Involving your kids in your saving efforts is not really for the money. You want to teach and encourage them to save for the simple reason that it will make them more responsible with money management. It may be a bit of a challenge to do this and probably one of the first questions that you will ask is when should you start?
There is no definite age that is defined by financial experts. It varies per child and you should know better if you are a parent. A safe way to determine if your child is ready is when they can understand the concept of money and how it is traded in purchase transactions. When they start asking you to buy things (it can be as early as 3 year old), you can start introducing them to the whole saving lecture.
However, it may be best to keep the practical application until they start going to school. That way, you can use their allowance to teach them to manage their money.
Here are some tips that you can use to help put your child on the saving bandwagon.
Set a good example. The best way to teach your children how to save is to practice it yourself. If you are extravagant in your ways and you do not put aside money for the rainy day, it will be next to impossible to force your kids to save. Their only chance of learning is by looking to an external inspiration but even then, it is not a guarantee. So make sure that you are saving yourself so that you can show your children how it is properly done and how you and the family are benefitting from it.
Give them a piggy bank. The first saving tool that we all get is a piggy bank. Just as it taught you the basic idea of saving, you can do the same for your child. Let them enjoy putting coins into it and let them decide what to buy once it is filled with money.
Let them manage their allowance. No one knows your child better than you so it is up to you when you start teaching them this valuable lesson. We’ve mentioned that the practical application is best when they start going to school because of their allowance. Instead of giving their allowance everyday, opt to give it to them on a weekly basis. When they get older, you can make that a monthly allowance. You will be hitting two birds with one stone because you can teach them how to budget too. But then again, how can giving them their whole allowance help in making them save?
Offer to match what they can save. This is probably the best way to get your kids to save. Offer to match whatever amount they can put aside for their savings. If they saved $10 from their weekly allowance, put in an extra $10 to what they have. It will encourage them to increase their savings even more so they get more from what you add.
Open a bank account once they are of age. You should also introduce them to the bank by opening their own account. Whatever they can save on that account will solely be their own money.
Do not give in to every request to purchase. Since your kids will be depending on you for purchases, do not always give in to their request. Although we want to give them the world, teach them that they should not always buy what they want – even when they can afford it. Explain why you are giving them no for an answer and be thorough with your explanation to ensure that they understand. If they really want to buy something, encourage them to save at least half of it.
Fun saving activities for the family
There are many things that you can do to make saving fun for the entire family. You just have to be quite creative to know what will get them motivated – especially your kids. Here are a couple of suggestions that you can use.
Make family financial goals. It can be an annual vacation that everyone can help save up for or an expensive gadget that everyone will benefit from. It can be a brand new TV or gaming device.
Create a saving meter and place it in a visible place at home. For the financial goals that you will all benefit from, you can create a saving meter that everyone can monitor. If it is a fairly expensive goal, setup milestones with the corresponding reward.
Turn it into a contest. If you have one or more children, turn it into a saving contest. Whoever saves the most will get a prize like not doing the dishes for the next week until someone new is declared a winner. Make it a monthly or a weekly thing – it depends on what your children can cope up with.
Be as creative as possible with your gimmicks to get everyone to save. Instill in your children how an adequate saving fund can save them from financial ruin. Let them know that it is not really about how much you put aside every month. It is more of how consistent you can be in your efforts. A small amount every month will grow significantly as long as you stay true to it.