Teaching Kids to Start Saving Money Early

Saving Money Early

According to financial guru Robert Kiyosaki, the most important thing any parent can teach their child would be about money. As money in itself is a language, the nuances of this language need to be taught by parents to their children. If proper financial advice was imparted to children, they would carry these information with them as they grow, making them financially adept persons in the future.

The most basic thing you can teach your child about money would be saving. By teaching them how to save, you would help build their character and make them learn the importance of money. Saving will allow them to learn how to stick to goals and persevere to attain what they want. Here are some ways on how you can start introducing your child to saving:

Go back to basics

One of the easiest ways to start saving for your child would be by having a piggy bank. Your child should be well aware that the money in the piggy bank is solely his or her property. However should he or she want to use it, permission should be gotten from you.

Follow strict rules when it comes to saving

Strict rules must be enforced with savings. If your child’s savings are in the piggy bank, make sure that no one allowed to take money out of the piggy bank without getting permission. Moreover the money should not be touched for daily expenses. That way your child will have the notion that savings are meant for rainy days or bigger expenses.

Open a bank account for your child

When your child gets bigger, you can already open a bank account for him or her. Place all the money from the piggy bank in the savings account so your child can accrue interest. A lot of banks offer bank products for children only. There are not that many requirements for opening an account. Moreover the required balance is usually quite minimal. Some of them even give discounts for purchases at toy stores and the likes. So check out the different banks to see which one would be best for your child. Make sure to bring your child to the bank so you can show your child the details of his or her account. That way he or she can see his or her account actually growing. This will be a come-on for your child to save even more.

Reward them only during special instances

It is tempting to give your child money every time chores are done. That way they will do their chores. However this will give them the notion that they need to be “bribed” in order to do their chores properly. This should not be the case. Only reward them during special occasions or if they do special chores, which are not part of their daily chores. That way they can differentiate instances when they will be rewarded.

Allow your child to make purchases

Child Buying Toys

Your child will not see the point of having to save if you do not let him or her make purchases from time to time. If your child has a toy or book in mind, you can let them know that you will only pay for half the fee. That way your child will set aside money for the toy or book he or she wants. Moreover you can be sure that your child will really choose a book or toy that will really be used. As he or she will be using his or her own money, chances are the item bought will be highly treasured. Furthermore they will learn to be more responsible with money as they need to spend their own.

Openly talk about finances

Be open with your family’s finances so your child will know the importance of having to save. If your family’s finances are at a low point, tell your child about it. So they know that they are not expected to spend money lavishly or impulsively.

Teaching your kids the value of money is very important. Although they might fully grasp the concept of having to save, it is important to instill this habit in them as early as possible. That way they will take this habit to heart and bring this along with them throughout their life.

Photo Attribution:

Featured and 1st image by Joyous! (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)], via Wikimedia Commons

2nd image by Sander van der Wel from Netherlands ([56/365] Maybe next year) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons