Making the young better money managers is vital to make them understand matters such as earning, spending, and saving. Money, as we all know, is a basic means that we require to acquire necessities in life, including food, sustenance, clothing, medical support, and all sorts of provisions. Today we are going to talk about how to prepare your kids to save money.
The more you teach the young about money and the vices that accompany it, the more they will become better at avoiding compulsive behaviors, including the likes of spendthrifts.
In a recent study by Youth.gov, 18% of 15-year-olds in a survey were found to have not learned the fundamental financial skills that applied in everyday situations such as budgeting, comparison shopping, and invoicing.
Furthermore, high school seniors scored an average of 48% on financial literacy exams, showing a strong need for comprehensive financial education. With increasing student debts and credit card debts amongst the young, no one can deny the obvious.
In light of this information, let’s take a quick look at some of the ways through which you can prepare your kids to save money.
1. 3 Jars Approach: Saving, Spending, & Sharing
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In the three jars method, young kids can be taught to learn about money and manage their resources based on their spending, saving, and sharing. This also teaches them important lessons regarding philanthropy and acts of charity. These are all areas which a child can grasp at a very early age.
In early China, during the Han Dynasty, ornamental money trees were popularly grown and continue to be popular during Chinese New Year events.
They signify that wealth and prosperity are gained through hard work, sacrifice, and continuous effort. The three jars method is a great way to teach children about managing money and even create a liking for them to nurture compassion towards others.
2. Encourage Them To Earn Money
Nothing teaches the value of money more than earning it for oneself. A simple lemonade stall or holding a bake sale can allow kids to understand that making money is tedious, and one should never take their earnings for granted.
The long hours spend to earn money would also teach your kids that fruits of labor are not meant to be toyed with, and they should consider making them last for longer.
There are various ideas out there for young kids to start making their own money. They can organize a garage sale, start selling their own arts and crafts, join a babysitting business, do odd jobs around the neighborhood, or even offer pet care services.
3. Discuss Good & Bad Examples
When it comes to leading by example, you can leave a strong impression and influence on your kids.
Plus you can also share with them some really good examples of saving money by making them understand how health insurance, life insurance, property insurance, and automotive insurance can help people get out of desolating situations.
On the other hand, we know pretty well that you don’t have to look far for bad examples. I don’t mean to be sarcastic here, but even us adults can use these bad examples to teach ourselves about the value of money as well.
4. Introduce Tracking Their Spending
This is another great method to make children realize where their spending is being utilized. Track spending allows them to understand how they have spent their money and whether they should continue to follow this kind of behavior in the future.
Self-realization serves as the core to change spending patterns and general conduct with money.
In fact, there are many smartphone applications that teens can use to track their spending such as Mint, BuysKid, Greenlight, and FamZoo, to name a few. All they need is to maintain a ledger regularly regarding their spending, which can be reviewed periodically, and as a parent, you can help them find corrective actions.
5. Needs Vs. Wants
While basic needs are undeniable, we as humans tend to have limitless desires and wants. As an adult, you should teach your kids the difference between needs and wants as well as how each should be catered to respectively.
Understanding the basic difference will put them in a mindset to favor needs over wants, and in doing so, they would be able to realize that money should be spent on achieving more significant goals in life.
This is also a great time to teach them how saving can help them acquire insurance to protect their lives in the events of mishaps.
6. Play The Creditor’s Role
Creditors in accounting are the lending parties that offer individual and business entities loans. However, each creditor has their own reasons, justifications, and criteria to choose whether to withhold money or lend it to someone.
As a parent, you can play this role; however, you could apply some tweaks on your own. Ask your children to make you confidant when it comes to money. They can submit their due amounts to you for safekeeping.
Then when they need to spend money, they should present a solid reason to justify their need in order for you to allow them to take money from you.
While there is no lending involved, but still that way they will learn how to spend money only on important things. High school students often play their own creditor’s role when they consider requesting experts to write my assignment during a time of need.
7. Ranking Importance & Urgencies
Another great way to teach your kids to save money is to ask them to create a chart for themselves where they can align important and urgent tasks accordingly that require spending of money.
For example, an urgent task could be to buy stationery items for homework that is to be completed and submitted on the due date, and an important task could be to save money to buy a raincoat for themselves for the upcoming rainy season.
Important tasks are usually long term related, whereas urgent tasks are those which need immediate action.
According to your understanding, you can teach kids how important it can be for them to save for an insurance policy in the future that could protect them from greater suffering from an unforeseeable event. Students who request professionals to write my dissertation for me would often consider spending on related academic tasks as urgency.
8. Set Achievable Goals
Setting saving goals for them is great; however, you need to make sure that they are achievable. This will build up their confidence and motivate them to save and reap the benefits later on. It will also teach them to be patient and how to become resilient in their approach.
Once they learn how savings can help them take control of their future, they will slowly develop an unbreakable habit around it. In fact, the chances are that if you succeed in teaching them about savings at an early age, they might even become more prolific at it as compared to the many adults in our current society.
Teaching your kids about saving money is a great lesson to impart for the future generation. The coronavirus has made the world bend down to its knees, and god forbids what other things await us in the future. Having savings by your side gives you the reassurance you need to make tough decisions when the push comes to the shove. We all must learn about the benefits of savings and teaching our kids could help us to polish our own skills while we are at it.
Claudia Jeffrey currently works as a Product Manager at Crowd Writer. This is where higher education students can acquire cheap dissertation writing services from experts specializing in the field of study. During her free time, she likes to play ping pong with friends and family at various indoor venues.