As parents, it is our collective responsibility to teach our children how to save and make wise financial decisions. It all starts from when they are little. Saving money is one of the most important aspects of building wealth and having a secure financial foundation, and so, cultivating the money saving habit into your children will be beneficial to them.
It might be difficult at first, as kids love to buy everything – as long as they have the money. But we can teach you 5 ways to cultivate the habit of saving in your kids.
Give them money. You cannot expect them to save from nothing. Monitor the amount of money that flows into their ‘hands’ either from you, or guests. Teach them to take part of the money for themselves and drop the rest in their piggy bank.
A Piggy Bank! Every kid should not just have a piggy bank, but should be taught the usefulness of having one. Tell your kids that the goal is to fill up the piggy bank with money, until there is no more room. Explain to them that when the money reaches a certain level, it will be used to buy that toy or shoe they have their eyes on.
Lead by example. Many of our parents collected money given to us by guests and promised to save it for us. Well, that turned out to be untrue. Please, do not do that to your kids. You’re not only going to create a financial distrust in them, but they will hastily spend the money, so you wouldn’t collect it.
The 50/50 rule. You can introduce this rule where your kids and as well as yourself contribute money to buy things. If your kid wants a toy of 2,000 Naira, let him save up 1,000 Naira, and then you complete the money to get the toy. Please, do not do this for necessities like food or education. It should only be for ‘wants’.
Open a bank account. As your kids grow, you need to open a bank account for each of them. When their piggy bank is full, lead them to the bank and open the account for them. This will teach them about credit cards and savings accounts. The earlier, the better!
Teach them. All these would be useless if you do not explain the need to them. Let them know it is for their future and financial independence.