Savings are indeed an important part of life but developing this habit takes time and effort. The earlier you start teaching your kids the importance of savings, the easier it is for them to adapt savings as a part of their healthy financial habits.
Moreover, the kids who tend to learn about saving and spending while young often have a much easier time managing their finances as adults. So, if you as parents are struggling to introduce savings to your kids, here are few ways that might help you kick start.
Teach them short-term vs. long-term saving goals
The key to introducing savings to your kids is to teach them goals. You can even divide them into short-term and long-term savings goals. Say your kids reaching set savings goals can get them to buy something they want. For example, say them if they reach a short-term savings goal of 10$ they can buy their favourite toy and if they save more for the long term, they can buy a video game.
You can even go one step further and let them keep track of their goals in an organized worksheet or a book. This can be separating a month into four weeks and keeping a target to reach for each week. This will then eventually help them reach their specific savings goal for every month-end.
Offer incentives as a motivation
We all need a little motivation to maintain consistency in our efforts towards something. The same principle applies when it comes to introducing kids to the importance of savings. Giving them bonus incentives when they reach a specific savings goal can motivate them to save more at least to receive such incentives.
You can offer half of their savings goals as incentives when they reach their set savings goal. For example, if they reach their set savings goal of $100, you can offer them $50 (half of their goal). If not you can breakdown such incentives by offering bonuses when they reach a halfway mark towards their goal.
Either way, it’ll make them feel they can receive more money by sticking to their savings habit, which will keep them motivated.
Make savings fun and interesting
Spicing up a kid’s interest towards savings takes two main ways; games and using visual aids. With most kids love playing games, introduce them to board games like monopoly or the game of life which teaches basic financial principles. You can also find similar age-appropriate games or videos online that your kids will learn from.
The next best thing to do is use visual aids to teach them savings. Visual aids can be anything between a locker where they can save money at home and watch them increase or even the classic piggy banks. And if you’re looking for childrens money boxes Australia has decent options available with interesting and unique designs. This might encourage your little one to save up in no time.
Whichever your personal choice is, try to divide the choice of your savings place into two banks, one for saving and another for spending. When they see their savings increase than their spending, it will encourage them to keep adding to the savings bank.
As a final word, it’s best to say that these are only ways to introduce and encourage your kids to the concept of savings. As parents, it’s in your hands to back them up and guide them wherever needed until they get a firm hold of this habit.