Teach your kids to be Savings Superheroes!
We all want our children to grow up to be financially savvy.
At Finance Detective, we know better than anyone that it’s an important life skill…
The foundations we lay today, will help our children manage their money as they grow into adults. By helping them develop an appreciation for money and teaching them how to value every dollar today, you are giving them the skills to cultivate a prosperous financial future.
So how do we teach them these valuable skills? Here are our tips:
Make it fun
It’s important to make saving fun. From an early age you can start teaching your children about money. Role playing at home and setting up pretend shops can educate your children about the value of money and will help them understand the transactions that take place. After all, who doesn’t love a lemonade stand?
Make it real
Just like the superheroes, money can seem quite imaginary to children. Especially with our increasing use of plastic and the internet to make our purchases. Letting your children handle physical money and pay for things with cash will give them a tangible example of how to count money and understand its worth.
Show them different ways to save
Encourage your children to save in different ways. If you choose to give your children pocket money, encourage them to put it away and save for the things they want. A good idea is to use fun piggy banks, envelopes, or containers covered in the picture of an item they are saving for. This will give them the motivation to reach their goal. Don’t forget to count their savings every so often and remind them of how far they have to go.
Once they are a little older, open your kids their own bank account, give them a saving’s target and once they reach it take them to the bank to deposit their money. Many banks have specialised bank accounts for children, check out your local institutions and look for accounts with:
- no minimum balance
- no monthly fees
- and a high interest rate.
Match their savings dollar for dollar
Give their savings superpowers! Try rewarding your children for saving by matching them dollar for dollar. Every dollar they save, you contribute another dollar. They’ll be excited by this extra incentive and you’ll be surprised how much more money they will save. This will work particularly well with kids who tend to ‘spend it as soon as they get it’.
Lead by example
Help your children develop good money habits by leading by example. Involve them in your everyday transactions. This could be as simple as taking them grocery shopping and encouraging them to choose products that are on sale, or teaching them to buy products that have greater value for money.
When they are a little older, involve them in creating the family budget. Sit down with them and write down what money you have available in one column and all of the family expenses in the other. Then together you can allocate the funds to the different areas of the family budget. This will teach that money is limited and that spending must be highly considered.
As a parent or caregiver you are your child’s biggest role model, so try and set a good example with your savings habits and be a ‘Savings Superhero’ yourself.
If you’d like to learn more about teaching your kids to save money, there are many supportive resources on the internet, including: