Becoming a parent is a major event in anyone’s life. With it comes the responsibility of teaching your child all kinds of life lessons. You hope they will all be good lessons, ones they can take forward in a positive manner to use throughout their life.
One of these areas concerns saving money. If a child grows up with a good sense of how to save money and where to save it, they will have skills they can use when they grow into an adult. If they don’t have any real concept of money and what it is worth, they may well run into financial difficulties at some point.
How soon is too soon?
In reality you can start introducing the subject once your child has learned to count. You could use banknotes and coins when you are starting to teach them about sums, as this will help them understand how cash is used.
One great game to try at home is to set up a play shop they can play at with you where you can use real money to illustrate how much things cost. It doesn’t have to be exact but it will help them to get a handle on how things are bought and sold with cash in the real world.
Teaching through an allowance
Many kids get an allowance once they reach a certain age. If you plan on giving your kids an allowance you can introduce the concept of saving (if you haven’t already done so).
The idea is you can encourage them to save some of their allowance each week so they are able to save up for things in the long term. Make sure you give your child their allowance in smaller bills for this purpose. It is easier for them to save, say, $5 if you give them a $10 allowance in two $5 bills than it is if you were simply to give them $10.
Be prepared to answer any questions they may have
Kids are curious. They’ll have questions about why it’s important to save and what the benefits are. They may well ask plenty more unusual questions too. Make sure you have an accurate answer for each one of them. If you’re not sure of a particular answer make sure you find out and then tell them.
Each child is different
It’s impossible to give an age for when a child is ready to learn more about the ins and outs of saving and investing. Some will want to learn earlier than others, while some might have a natural curiosity about money. Some will want to save rather than spend, whereas others will be the opposite. Whatever your child turns out to be like, you should consider teaching them the most important lessons to ensure they see things from both sides of the fence. Spending money is not a bad thing and neither is saving – you just have to have the right balance of both to make life work.