When it’s time to give the money talk, most parents shy away from this topic until they feel there children are old enough to understand. Some even think, introducing their children to money at early stage may corrupt their thinking.
However, there is no age limit to start teaching your children about finances. Money runs the world, the earlier they understand the ropes, the easier it will be for them in future. Here are five tips to teach your child how to save money:
Differentiate wants from needs
Children can be very demanding and more often than not parents fulfill all their hearts desires. In these cases, where everything is at their disposal, children rarely know the difference between what they want and what they need.
When a child is used to getting their way all the time, they turn their wants into needs and start getting frustrated.
Explain to them that needs are the basic things you provide them with like food, shelter, schooling and clothing. All the others are wants and that they are not necessarily things they must have.
Let them earn their own money
Letting your children earn their money doesn’t mean they work for their basic needs. It simply means letting them learn to earn money for their wants. When children understand that nothing comes easy at an early stage, they will value the importance of saving.
They will grow up understanding the value of hard work and the joy of enjoying their own sweat. When they are used to getting their way all the time, it will be hard for them to understand that you won’t always be there for them.
Set saving goals
For children, everything they do has to have meaning. You can’t just make them save without stating what the end goal is. For instance, when they tell you they need a new toy, calculate the amount to manageable portions each week so they attain their saving goal. Do not be too harsh with your limits, they might be discouraged.
Also not only will this teach your child the importance of saving and earning their own money it will also teach them the value of patience. They will understand that not everything they want they will get in an instant.
Provide a savings box
When introducing your child to the financial world, they will need a place to stash their money. For the younger kids it is easy because you can get them a piggy bank while for the older kids, you can open bank accounts for them so they can understand how banking works and they can track their progress.
Furthermore, when they have access to their money they can trust you and feel motivated. Some parents like to ghost their children when it comes to finances and accountability. Teach your child the importance of transparency when it comes to money, it shouldn’t be a dirty game.
Talk about money
Last but not least, make money talk a norm in the house. You are a superhero to your kids but let them understand that even a superhero can sometimes get broke. Most parents like to block their children from the realities of life, it helps for some time but soon they will start to understand what you don’t tell them.
Talk to your children about savings, let them understand the importance of saving their money before forcing them into it. When it comes to giving money talks, never lie to your children. Tell them what they need to know.