Parenting 101: How to Teach Your Kids about Saving Money

We were still kids and wanted nothing more than to grow up quickly. We used to associate adulthood with freedom and the ability to buy anything that we wanted. However, we grew up and learned the hard facts of life.

As parents, we must teach our kids to be responsible with our money. We must show them that we need to save money to buy the things we want. Most importantly, we simply cannot purchase random stuff on a whim.

If you are unsure how to begin their financial education, you can start with these lessons. This blog enumerates tips on how to approach the concept of saving money.

Learn the Difference between Want and Need

Your kid’s financial education does not necessarily start with complex money lessons. To instill good economic values, you must first teach them to differentiate between want and need.

Young kids often want things that they do not need. Teach them that they can still achieve their goals even if they do not purchase an item. It involves explaining to them the consequences of their actions.

For instance, if your child wants a toy, tell him that you will not be able to afford the toy if he spends his money on other things. Teach him to list priorities and decide which item he needs. Ultimately, he will have a better idea of what he should or should not buy.

The same lessons may be applied to adults. Although we have a lot of things, we must still be able to distinguish between what we want and what we need. 

Establish a Savings Goal

The next step in your child’s financial education is to set a savings goal. Children are often encouraged to learn how to save money by setting objectives.  

Teach your kid to make a budget and calculate how much money is needed for achieving his goals. Show him ways to save or earn money. Explain that coupons and gifts from friends and relatives are perfect presents.

Teach your children the concept of buying online, too. You can teach them the difference between buying online and buying from a mall. Explain to them that the latter will require them to shell out for transportation and other expenses.

Deposit in their savings accounts every time they save or earn money. Doing this will help them become more aware of their growing savings.

Encourage Your Kids to Make Money

Instead of buying them something they want, teach your kids to earn money. Refer them to a tutorial online or on YouTube and explain how to do some simple tasks. Take them to a flea market and allow them to sell the things they have at home. It would be best if you also encouraged them to think of unique ideas for starting a side business.

Pick one of their ideas and help them do a cost analysis. For example, your kid can earn money by conducting a lemonade stand. Show him how to use the profit he will earn to purchase things he wants.  

Conclusion

These tips on how to approach saving money can help your kids become better with money. Though they are still children, they must start understanding the importance of saving money.

You can be more proactive with your kid’s financial education by downloading Kiddie Kredit. We will be partners in establishing responsible practices concerning money, so subscribe to our newsletter now!