As a wise parent, you should start teaching them how to save money for kids. From an early age, your kids need to know about the importance of the basics of financial planning.
You can start teaching them by saving and managing pocket money. At this stage, the role of parents in laying the foundation for financial management is crucial for the next stage of age.
You can also be more selective in buying children’s needs. Kids who tend to be extravagant in using money must be controlled by not giving money carelessly.
How to Save Money for Kids
There are many ways to teach your child to save money. Here are tips for teaching children to save money.
1. Spend Money Wisely On Toys
Many parents obey all of their children’s wishes to buy toys. Of course, this is an example of parents who are not wise since they do not teach to be frugal.
A smart way about how to save money for kids is to consider whether your child will play for days carefully?
Instead of spending money on expensive toys, make sure your child has the necessary toys to play with.
2. Teach Kids to Distinguish Between Needs and Wants
Kids tend to follow friends or buy what they like and see. Therefore, teach your children to distinguish between needs and wants.
Give them an example that needs are basic things that must be fulfilled, such as food, housing, and clothing. Desire is an extra and not a priority.
It is essential and will be their consideration in spending money in the future.
3. Let Your Kids Know to Make Simple Financial Goals
The next way about how to save money for kids is to teach simple financial goals. You can start by asking them to play simple games, for example, monopoly, etc.
Starting early, teach your children to save for all their needs. Slowly but surely, they will be more responsible for themselves in terms of financial management.
4. Introducing the Difference between Saving and Spending Pocket Money
No less important, because the habits of children tend to live extravagantly, to encourage children to live frugally.
The trick about how to save money for kids is to introduce them to the difference between saving and spending pocket money.
Take your kids to the bank, so they know what people are doing at the bank. At the same time, parents can explain the difference between saving money in a piggy bank and saving in a bank.
5. Tell the Kids there is an Amount of Money to Save
Inviting the kids to live frugally can also be done by telling them that they cannot have all the money because there is an amount to save.
Here, you will teach good habits about saving and teach them to save a lot of money.
Later your kids will realize that saving is significant to do.
6. Inviting the Child to the Bank to Open an Account in the Child’s Name
In addition to knowing the activities of people at the bank, you also need to open an account in the child’s name. It means that you both teach and practice it.
Starting a habit of saving early is the key to everything. Instill habits in children about the importance of saving to become a character that underlies them in managing finances later.
7. Teach Children to Manage Finances with Monthly Money
You can teach children to manage pocket money with a system of monthly allowances. It is also one way about how to save money for kids.
Especially for parents in the US, if you usually give an allowance of $5 per day, try giving them $10 per day.
The condition is an excess of $5 to save. This is an important lesson for frugality for children.
8. Teach Children to Record the Amount of Every Money Saved or Spent
Another way is to teach children about the importance of managing finances in an orderly manner. For example, asking children always to record every money saved or spent.
Here’s a practical example. Try separating children’s pocket money by using 12 small envelopes and a large envelope.
Allocate one envelope for each month. Then invite the child always to save the purchase receipt and include it in every envelope. Get used to them noticing what is spent.
9. Never Force or Give in to Your Child
The final step you can take is not to force your kids or yield to your child’s demands for an expensive and non-educational hobby.
You have to be firm. Do not comply if your child asks for something beyond your ability.
You can divert it for savings for the money that is usually used for expensive and less useful things.
It is time for you to teach kids how to save money for kids. Children are an investment in the future, so you as a parent must direct it, including in managing finances properly.