Use Clear Jars
Unlike piggy banks, clear jars give a clear representation of your kids’ saving progress. It is crucial for the kids to see the money growing so that it keeps them encouraged to continue saving. As a parent, it is your responsibility to make a big deal out of it.
Fun activity: Prepare 3 clear jars and label them as follows, “Saving, Spending and Sharing”
The breakdown of how much your child should put inside each jar is up to them. However, financial experts recommend 50% for spending, 40% for savings and 10% for sharing.
Cool tip: Another cool thing you can do to motivate your child is to paste the item your child is saving for on the spending jar.
Be a Good Example
As a role model to your child, it is important for you to lead by example. Practice what you preach and do what you say. If you are telling your kids to save money but you spend excessively on irrelevant things, you are creating confusion. Note that these young ones are watching your steps and they are likely to develop your traits and habits.
Take the initiative
Actions speaks loud. It is simple to say that an action figure costs 200 bucks. Make these kids to experience the transaction by giving them room to save for their toys. When their money jar gets filled, allow the kids to decide how they want to spend their money: whether to continue saving or to spend it on the toy.
If the chose the option to purchase a toy, turn their coins into bills and make them pay for the toy themselves. This simple act will give them a vivid and clear understanding of how financial transactions work.
Education between needs and wants
Do not always yield to your kids’ whims as that could give them the impression that they have the green light to purchase whatever they want. Better yet, try to reveal and show them the difference between needs and wants. Start gradually and be creative in your approach! You can create interactive game sessions to prove this point to them.
Take them along with you to the Bank
You can take your child along with you to your bank and create a savings account when their saving jar gets filled.
Make them to know the importance of keeping their money safe and how their money grows when it is kept in the bank. This is a good starting point which will help the child to know the value of saving money and investing it.
Turn them into motivated workers
After teaching your kids on the importance of managing money, emphasize this point by showing them the difficulty of earning money. This can be done using a chore-reward scheme where you give them some money whenever they follow instructions and do chores properly. If they fail to do these chores properly, then, do not give them the full amount or do not give them any money at all. Make them to know what it takes to earn money.
Record their saving and spending
One of the best ways to teach children about money is by teaching them to record their saving and spendings. Give them a notebook and a pen to note down their daily, weekly and monthly savings goals.
Furthermore, you can reward them whenever they achieve a certain milestone: it could be some cash, a new toy or some clothes.
Teaching children about money is not a day’s job but a life-long process. No matter how hard you try to train them for the future, experience remains the best teacher. As kids, they may make mistakes - which is quite understandable.
Conclusively, ensure that you make them to develop these habits early in life so that they can avoid many financial loopholes as possible.