Your children are growing and are more interested in the world around them. They might even be asking you for money more often. While teaching them to save money isn’t difficult, there are some tips to help make the process a little smoother. Here are some tips to help you:
Teach Them Wants vs. Needs
Children have a difficult time differentiating between wants and needs. Once they know the difference, they’ll be less likely to spend money on unnecessary things. Some ways to help you make this distinction in a way they understand are as follows:
- Use the what’s-in-it-for-me method. Explain to your children that they won’t feel good either way if they spend money on something they don’t need.
- Pictures. Show them the difference in price by showing them the change in price for things that seem similar.
- Comparison shopping. Show them how much you can save by buying used items or by shopping at a discount store.
Talk About Money
Once your children are old enough to understand money, it’s important to start talking about it. Because children hear money so often, they don’t realize that it’s a scarce resource.
By talking about money, you can explain that money is something that is limited and that they need to save it. Try these tactics when talking about money:
- Bring up money in normal conversation. Use it as a teaching opportunity. If your child sees you spending less because you’re trying to save money, he’ll be more likely to save his money as well.
- Talk to your children about the cost of their favorite things. Encourage them to save to get those things.
- Show them the difference in price for the same item by showing them the difference in price for items that are similar.
Give Your Children an Allowance
One of the best ways to teach children about money is to give them an allowance. An allowance allows children to practice saving and spending money. Here are some tips to help your children as they get their allowance:
Don’t give them more than they can spend on a weekly basis. If they can spend their money without feeling deprived, they’ll be more likely to save it.
Try to have them set goals for their allowance. This can keep them from spending their money on unnecessary things.
Don’t lecture them about how they should spend their money. It won’t help them learn about money and will only make them feel guilty about spending money. For older children, allow them to make choices about how to spend their money. If they make a mistake, let them learn from it.
Let Them Handle Money
A significant step in teaching children about money is letting them handle money. This will give them hands-on experience in spending, saving and giving money.
Start by allowing them to have their own bank account. By having their own account, you can track how they handle their money and help them to see when they’re spending money on things they don’t need.
The Value of Saving Money for Your Children
Nonetheless, this doesn’t mean that teaching your child(ren) how to save money is an impossible task. Keep the tips above in mind, and you should be well on your way to instilling good money management practices in the next generation.
Teach your child better financial knowledge today. Kiddie Kredit is a mobile app designed to educate kids on the credit system by completing chores. Get the app today!