It is never too early or too late to teach your children the importance of saving for their future. Depending on their age the teaching styles and savings goals may vary, but regardless of where they start, they will gain great lessons that will be lifelong. These lessons will help improve their financial future and help start them on the right track early on.
If you are thinking of teaching children of any age how to save, teaching them how money is earned at the same time can help them build healthier relationships with money. You can teach your child about earning money by paying them to complete certain chores or helping them find their first job. If you will be letting them earn money for their chores around the house it is important to decide how much you can afford to let your child earn. Earnings from chores or their first job will help them understand the true value of money. It also gives them a different perspective on money than the one they have been seeing for most of their life. Children typically only view situations where money is spent. While spending money does give you the opportunity to show them the importance of buying what you need over what you want, it only shows one part of a relationship with finances.
If you are teaching young children how to save, you can begin teaching them with just a piggy bank. A simple piggy bank can show them the growth they can achieve over time by simply putting a steady amount into their piggy bank each day. You can begin with a small-time frame such as a month, and if that goes well continually increase the time frame to show them how time impacts your savings. This helps them understand how consistency can pay off for long term goals.
If they are having trouble savings just for the sake of saving you can try motivating them by setting an end goal such as a toy they really want. By having the savings goal lead up to something that they want it can help them understand how savings works. After they reach their goal and can finally get their reward, you can try explaining to them how constant savings would allow them to get their toy faster because they would already be partly if not entirely there. This can help them begin to see the value in saving consistently overtime even without a specific goal.
Other ways to help children who struggle with long term savings goals can be incentives. Instead of having one long term goal, you can give them smaller ones that act as breadcrumbs to keep them on track. This will allow them to get a small reward more frequently giving them more motivation. It is also important to be forgiving if they get distracted, miss a goal, or buy something else early on in the budget. These mistakes are great moments to help them learn to be forgiving to themselves and learn from what they did wrong. Failure can be the best form of learning if you let it.
When your child gets older and begins to pay for a wider range of things, it can be helpful to sit down with them and help them build a budget and open a bank account. Having conversations with them about money, saving, and finances regularly can help them continue to grow and learn from the wisdom and knowledge you have gained over the years. These open conversations will help them build a strong financial future where they will not be afraid to ask for advice and continue to learn.
If you need any financial advice reach out to your local bank or financial planner to help you continue to improve your financial future.
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