Now that the Yuletide is over, it is time to teach your wards how to save from the monetary gifts they earned during the holiday.
RECALL
No age is too small to teach kids to save; start early.
Teach them to work and earn money so they can understand its value.
Get them piggy banks to encourage savings.
The month of January presents an opportunity to teach children the merits of saving, especially as it is arguably the longest month in the calendar (that is for people that have exceeded their budget for the holiday).
It is a habit that must be cultivated and parents have to teach their kids to save. The most important thing is that, the earlier you start teaching your children the habit of saving money, the better for them. Even toddlers can do it, but you have to teach this concept in a way they’ll understand. Then, as your children grow, you can introduce more sophisticated saving strategies.
WHAT TO DO:
Make Saving Fun for Children
A financial coach, Mrs. Gbemi Adegbite, explains that it is no longer profitable for parents to collect every stipend given to kids by family and friends who come visiting.
She says, “Kids should be encouraged to have piggy banks where they can drop their savings. One should reward kids for certain chores that they do, which may include washing the cars, tidying the kitchen and encouraging them to save 95 per cent from that cash reward.
“At the end of six months, put together what each child has saved separately and then add 100 per cent interest on each of them. This means that whoever saves more has more interest and vice versa. This will encourage each kid to save more so as to earn more and they will eventually see saving as a lifestyle,” she adds.
Use different envelopes/jars
You may be familiar with the envelope budgeting system for your own money, but this can also work for children. On either envelopes or jars, have your child draw pictures of what he or she wants. You may also want to help your child understand that some items will take longer than others to save for.
For example, the short-term savings container might have a picture of a specific toy, while the long-term container might have a picture of a trip to Disneyland. Teach your child to set aside money for short-term and long-term goals, and have another container or envelope for spending on everyday items.
Make a Savings Goal Chart
Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. You can represent each week with a box and your child can put a sticker in that box once the money from that week’s allowance is set
aside.
“We did this with my son, and he put a picture of the Transformer toy he wanted on the chart. We figured out how many weeks of allowance it would take to save up (after his long-term savings and church donations were taken out). Every time he received his allowance, he would divvy up his money and put a sticker in a square (he loved stickers at the time). This way, he could see himself getting closer and closer to his goal,” she added.
Offer Rewards for Saving Money
Consider rewarding your child for saving his or her money. Much like my credit union, which offers t-shirts and other prizes, you can offer prizes to your children.
For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves. Try stickers, an extra 1/2 hour of video games, toys, or whatever motivates your child.
Set a Good Example
One of the best things you can do is let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is “normal.” Plus, since most young children want to be like their parents, seeing you do it will provide them with money lessons that further inspire them to save.
Mr. Basil Adimorah, a human capacity trainer, says no age is too young to teach a kid to save. He says, “Especially at that late stage of nursery school, you can teach them to understand what money means. Teach them to work and earn money even though they are small because when you give them money most times, they will think it is easy to get.
“The principle is let them do certain chores that ordinarily Teaching kids to save they would not like to do, like washing cars, for which they will earn money and you will see them eager to work. I do not mean the usual chores they would ordinarily have done because they won’t be paid for that. I mean the one you would have paid someone to do like washing the cars, sweeping the compound, etc.”
