Teaching your kids how to think about and handle money, can really have a big influence in the way they handle it. Unfortunately, we all need money, but with a proactive approach, we can prevent it from controlling us. Teach your kids about saving from a young age to help them deal with financial stresses in the future.
Start with Something that Represents Money and Make it Fun
Before ripping out the spreadsheets and calculators, think back to when you were a child. We didn’t have the same understanding back then, so try to introduce them to the topic with an added bit of fun.
You can use money ‘alternatives’ to help them understand the concept. This could be done in the form of a reward system that praises good behaviour etc. These ‘rewards’ can be distributed in the form of points or coupons, which they can use to ‘buy’ or ‘get’ something they want – which require a different number of coupons. Soon they will realize they need to collect more than one, and ‘save’ these items in order to achieve a bigger goal.
Make a Savings Chart
Apart from grasping the concept of saving, they need to understand how time influences the savings. Once you’ve established what it is that you kids want to work towards, you can create a colourful chart that represents a certain amount of days or weeks. This will teach them about persistence and delay which will help them understand that saving ‘money’ takes some time.
The Money Jars
Once you’ve introduced them to real money, explain that there are many ways in which to use money. Start by placing three jars labelled ‘Savings’, ‘Spending’, and ‘Sharing’. When they receive money for a birthday or as a reward, divide the amount equally between the jars. The spending money should be use of small purchases, the savings for bigger splurges and the sharing for donating to charity or helping a friend in need. This will help them understand that money is used for different things and sometimes you don’t get all of it to use at once.
The ‘Sharing’ jars will teach them about giving, and that money isn’t something that is just for yourself. Being able to share money is a great gift and the act should be inspired.
These are just some of the ways in which you can introduce your kids to money and learn them how to save it. Building a positive relationship with money can lead to better decision-making and financial stability in the future.