How to Teach your Children to Save Money

Money management for kids is not an easy virtue to learn especially that they do not have yet the sense of self-control and the ability to discern priorities and luxuries. Kids usually depend highly on what they want for the moment not knowing the big difference between priorities and treats. Parents can help their children enhance their money management skills by opening a savings account for them maintain and boost as they come to the right age.

Children can be taught the value of money by encouraging them to spend wisely. Parents could not expect much from other institutions like schools and the communities because it is already a given fact that children learn primarily from the home and that parents are their first teachers. Money management can initiate from you, parents, because the primary source of money for your children is you.

Before opening a savings account in the bank, you should teach your children to save from their allowances. Household chores could be a great source of extra allowance for them. Ask them to help you out with the house cleaning and or gardening. Give them a little extra cash for their job well done and be able to encourage them to set aside some amounts as their savings.

You should understand that if parents appreciate the value of prioritizing for their needs, then children should do the same. Let children realize that it is difficult to spend something out of their own labors. Thus, working for extra money would allow them to set their priorities especially when it comes to spending.

Money-saving expert’s advice the initial use of the money ed box which is usually divided into four parts. These parts are known as the living, giving, wealthing and saving. The living and giving divisions are usually easily accessible so that children can open them anytime they need to. On the other hand, the wealthing and saving compartments are not for quick access because the money there is for long-term use.

This box would prepare the child when it comes to real-life banking experience. In the real money world, the child has to decide whether he has to opt for CDs or long-term savings accounts. It all depends on the amount of money you can afford to hoard or the frequency of necessities in which your money has to be withdrawn.

Giving your child some monetary incentives would also aid in the savings endeavor. If you have noticed that your child has saved much from his daily allowance, then you can add up a little amount as reward. How much money you give does not matter. For children, the impression created by the reward is enough motivation to engage into savings schemes.

You can also teach your children about money management if you engage into conversations that are oriented to financial management. For instance, you can go to the supermarket together and be able to let him understand that prices of goods have been rising. Talk about how you and your spouse work on the stretching of your family budget in order to cover the bills and at the same time purchase home necessities.

Children will also be aware of their finances if you orient them with the advantages and disadvantages of branded and non-branded goods or even bargains and sales. Financial literacy could not be taught intensively in schools that is why you need to keep track of your children’s financial transactions so that you can guide them accordingly. If you think your child is ready for real-life banking experience, then you can open that junior savings account which he can manage on his own.