Starting a saving habit early is a good start to instilling good money habits in children. Learn some of the steps to achieve it.
As an adult, we want to make sure our lives is comfortable enough by being financially stable. You will start to take note of your spending, you monthly savings, cashflow, and investment portfolio, as well as engaging with a Licensed Financial Planner to be able to achieve your financial goals. Now, imagine yourself as parents with children, how will you teach and encourage your kids to start saving money and paving way to build wealth and having a secure financial foundation from young age.
Even in school, children aren’t really taught about the benefits of saving money and some of us find that revelation only after experiencing financial hardships in our adult lives.
As parents, you have the responsibility and opportunity to empower our younger generation to start saving money, especially in these difficult times when economic recession and financial hardships are looming over us. Here are 5 steps to teach your children about saving money.
#1. Initiate a conversation
The first step towards educating your child about saving money is to talk about money in general. The topic of money shouldn’t be scary or taboo. Include them in a conversation about money and ask them questions such as “are we comfortable enough” or “is debt bad?” to see their answers. From here, you can determine the level of their understanding about financial situation and tell them what we can do to improve our finances.
Give freedom to your child when it comes to saving some portion of their allowance. Children shouldn’t feel forced or burdened to save so much money, but you can encourage them by visualizing how much money they can grow over time if they save.
Reassure your child that you are always open and available should they want to talk about money. Let them know that any questions is a good question and that there is no shame in making mistakes. This will encourage a positive outlook and more healthy conversation about finances in a family. Parents can see this as a way to update their knowledge in order to answer all questions while keeping their priorities checked.
#2. Prepare a savings jar
The next step to teach your kids to save money is to give them a savings jar, or typically known as a piggy bank. This instrument is the easiest way when your kids can see their money adding up before their eyes, and this could motivate them to save more. The goal is to put their money, whether in Ringgit notes or coins until it is full. The money usually come from allowance or duit raya obtained during festive seasons. You could even start letting them earn small wages from you for doing chores or running errands for you.
This habit can help develop discipline and appreciation for the value of money at a young age. Remind them that it is not easy to earn money and one way to appreciate it is to save money. As par