As parents, we are busier today than ever before, and that’s mostly because our kids are running around to one hundred different events, at every waking hour, pulling us in six different directions. I wouldn’t change it for the world, and I’m sure you feel the same, but it does make teaching lessons, and instilling values slightly more difficult, when you’ve got a nonstop weekend agenda for your eight-year-old.
One life lesson that often gets pushed back, or all together forgotten at times, is how to save money. It can be an awkward subject to explain, and we don’t want to have them too fixated on money at a young age. But It’s much easier to age rather than in their teens, because kids are much more likely to absorb that knowledge when they’re younger.
Training children to save does not only include verbal communication, but practice and patience on the part of the parents as well. It’s highly recommended for parents to teach their kids how to save money for the future in order to develop core values like: diligence in one’s work, patience and sacrifice, and skills like accounting and the ability to make wise decisions in determining one’s needs.
Learning to save, and understanding the value of a dollar works best when the kids see their parents do it, so rather than just explaining them the concept, it’s a good idea to try and be a role model about finances, and guide them throughout the process also. More than just giving them a piggy bank, and an allowance, here are some simple money saving techniques for kids that will help them take better control of their finances in the future and create a long-term savings plan.
Practice and Teach Values Before Giving Money
I know it can be quite difficult, but it’s important to stick to these values in your own life before teaching them to your children too. When you show your children values like integrity, patience, generosity and wise judgment, in any aspect of life, it will resonate with them. At times, easier said than done, but the hard work will soon pay off when you see your that your kids are also doing it. If you can slowly incorporate these values into the training by explaining to them the real reason for earning money, why there’s a limit to spending and why we need to share some of the resources we possess, they’ll end up learning multiple life lessons. Inject statements like—“Money isn’t everything, but it certainly is a tool to shape one’s future and others as well.” “It’s also a means to an end goal and doesn’t come for free.”
Let Kids Earn Money The Right Way
While your kids learn that there is value in money, help them understand that every cent counts by earning allowances from the household chores that they do. Some parents have an aversion to an allowance, and to chores. But there are other ways to teach the same lesson: like having your kids watch their neighbor’s dog or wash their car or even go into the business of selling lemonade or holding a garage sale at home to earn income. This will help kids experience hard work, perseverance, andcome up with creative ways to make money.
Distinguish Between Needs and Wants
Even as adults we find it difficult to distinguish between a need and a want.This problem can be corrected at an early age among children by letting them classify their own needs and wants. A need is essential for survival like food, shelter, clothes, and communication. A want is a desire to have something unnecessary to one’s survival. One way to let kids learn the difference is to let them go shopping. With many options surrounding them, and the means to buy things,you will be able to learn their default buying approach. Most likely it will only be things they want, so try not to scold them at first. Eventually though, they’ll be learn and start to understand buying power and the differences between needs and wants.
Apply The 20-10-70 Way
Incorporating the values mentioned earlier can get kids asking a lot of questions which you may not have all the answers to. One great way to separate finances and create a life-spending balance, according to some of the top financial advisors, is by practicing the 20-10-70 method. 20 percent of their earnings can be spent on themselves, 10 percent they give out to their community or those in need, and 70 percent which they keep as savings. This is a good way to build a lasting pattern of saving and being accountable to their finances.
Track Their Progress and Reward Them
After training your kids on saving money, set savings goals for them and if (when) they’vesuccessfully reached their savings goal, reward them. Positive feedback and reinforcement usually works very well with children.
Money can be a tricky thing to teach kids about, so it’s important to remember that, like with most other things, our children are all so unique! They learn differently and more often than not, a fun, creative, somewhat ‘outside the box’ idea will stick with them the best. So, get creative and have fun with this! You’ll both be rewarded handsomely in the long run, for teaching life lessons like this, to your children at an early age.