There is a big difference between saving on behalf of your kids and teaching them good savings habits so they can start saving on their own. Many parents want to put something away for their children’s future – perhaps to help them through college for example. But arguably, teaching children how to save their own money is an even more valuable lesson to provide.
Let’s take a closer look at this to see how it works. We’ve all heard parents say their kids think money grows on trees. You can probably think back to your own childhood and remember times when you thought the same thing. You may have continued to think it until something happened to change your approach. For instance, maybe you got old enough to realize your parents didn’t have a huge unending supply of money. Perhaps you realized they had to earn it before giving it to you – and there were many other more important areas to spend it on before that happened too.
That’s why it makes sense to focus on giving your own kids the best possible start when it comes to learning about money. Some parents give their kids an allowance, but others are coming round to the idea of paying them to do chores around the home. This is often a better method because they understand they are paid in return for achieving or doing something. This is the same as going out and earning money for doing a job, as they will do when the world of work beckons.
Some parents would agree you can never teach your kids about this at too young an age. They can pick up knowledge about money and paying for things much younger than we might think. Even play shops and play money can help in this respect. If you teach them some essential financial skills at this stage, transferring to using real money and earning it for doing chores won’t seem as unusual. This is true if you open a bank account for them so they can put any money they earn into it as well.
The point is that kids with little to no understanding of how to handle money will very likely be the ones that run into financial trouble when they are older. In contrast, those that have been able to understand its value for years prior to this will handle it better when they become responsible for their own finances. Kids very often pick up on their parents’ financial habits too, so if you handle yours responsibly it is a great gift to pass down to your children.
Give this some thought if you haven’t yet started teaching your own kids about savings and how to handle money. The right lessons taught now will make the world of difference to how they manage in the future. They may turn round one day and thank you for everything you taught them – and that would be a fine moment to have, wouldn’t it?