Teaching Kids to Save and Coaching Them on the Meaning of Money

Posted on September 6, 2010
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What do you do when your child is constantly harassing you to buy stuff for them?

Winston Churchill said: “Saving is a very fine thing. Especially when your parents have done it for you.”

There are people in life who always manage to achieve their goals, and usually the ones that achieve their goals are experienced in saving. To become experienced in savings, people learn the foundations of their saving habits from early on when they are kids. So it is extremely important that you teach your child good saving habits to give them the best chance at success in the future – and also make sure you are not the one always footing the bill.

Savings For Child: Where Do I Start?

Do you remember imagining buying your first car? Did you ever dream about what it would be like to have your own bachelor pad, chucking parties whenever you felt like it, nobody telling you to clean your room – wow that’s a dream worth dreaming!

The trick is to start with your kids strong desires – if they really want something badly they will extremely motivated to save for it. Children save money best when they have a focused goal in the their minds, so let them dream big – as long as they know that they are responsible for making your dream come true.

Make sure you convey to them absolute satisfaction of knowing that you have saved for something all by yourself, the feeling of independence is a feeling that cannot be replaced – its as important as the goal itself. Personally I will always remember when I bought my first car. I saved like a dog for many many months, when I finally bought it I had that feeling that I actually own something, not my parent’s but me – that was a feeling that I will never forget.

Saving For Child: Defining Goals

Get your child to sit down and brainstorm a list of goals, the key is to make sure they write it all down so it becomes real. Boys will typically be wanting to save up for a car, girls possibly wanting more long term goals like saving for college or an apartment.

My recommendation would be to start with baby steps, get them to tackle the short term goals first so they start building the habit. Short term goals might be a must-see concert which is on in a few months, perhaps that awesome bike that was in the window. Short term goals are an excellent place to start – make sure they write them all down.

Savings For Child: Making The Dream Come True

Ok they’ve written it all down, you’re half-way there – now how are they going to save enough money to achieve their goals? Depending on the goal, your child can consider a couple of different strategies

- Work backwards from the target – Ok so Lady Gaga is coming to town in 2 months time. If you daughter knows she has 2 months, then she can divide up the number of weeks and work out that she’ll need to put away 50 bucks each week to be able to afford those tickets.

- Save like crazy! – Let’s say your son really want to buy his first car like right now. There will be 2 deciding factors to manage: income, and expenditure. Get some extra income and spend as little as possible and he will accelerate how quickly he can buy that car.

- Use a regular saving plan – Say your daughter wants to buy her own place, whenever she gets paid by regularly keeping half her pocket money away she will be able to determine that she could buy her own place in 2 years.

Summary

Children save money best when they have a clear goal in mind, as a parent its your role to help them understand the connection between saving and achieving their goals. If you can do this, your child will be well on their way to independence.

Make a positive contribution to your son or daughter’s future now. Saving For Child Education Allowance for Kids is a topic that can taught easily and effectively. Encourage your child to start using money effectively.

categories: early education,school,making money,kids make money,kids money,saving money,investing money,home,parenting,parents,money,family,finance,kids

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