As kids grow and learn, they sponge up knowledge from everywhere – especially from their parents. So, why not have them sponge up smart money-management lessons? Teaching your kids to save money can help them develop good spending habits early so they’re better able to set up a financially stable future.
If you’re looking for places to start, put these exercises into practice and start teaching your kids to save today. Don’t worry, these aren’t textbook lessons. They’re meant to be fun and interactive.
Put Saving into Practice
You can’t save money without an income, and you can’t have an income without working. If you haven’t already set up a pocket money system with your kids, put together one that offers a weekly paycheque for completing hard labour (or maybe just a few chores).
By giving your kids a weekly income, they get to experience having their own money. It’s up to you whether you use physical cash, set up a bank account for them, or use both. And if you really want to encourage them to work hard and earn more, offer them a reward for going the extra mile (e.g. spraying air freshener after dusting).
Lesson: The harder you work, the more you can earn.
Build Goals Together
Now that your kids have money, they might not yet know exactly what they can do with it. A $10 note could get them a small toy, but a dozen $10 notes (after a few weeks of saving) could get them something much bigger.
Sit down with them and talk about the things they might want to save up for. It could be a ticket to a theme park, a new video game or new sneakers. It’s a fun conversation to have. Get excited with them about the possibilities and map out a savings timeline to show them when they can afford these awesome things. Having a clear goal in mind is one of the best ways to save money for kids.
For more tips on encouraging your kids to invest, check out this article here.
If there’s something that they really want now, you can set up the National Parent Bank and offer a loan with repayments that come out of their pocket money. Now, it’ll be tempting to offer a 0% loan, but having a small interest rate will teach them an honest lesson about borrowing.
Lesson: If you plan ahead, you can save and buy bigger things.
Extra Lesson: Working towards a clear goal makes saving easier.
Lead by Example
Teaching your kids to save money is a long process made up of lots of little lessons – and a lot of the time they’ll learn from their mistakes. But a big lesson you can do today is to share your family budget and savings goals with them. Explain the necessary costs (e.g. weekly groceries, rent/mortgage repayments, health insurance) and show them how you put aside your dedicated savings. And explain why. Are you saving up for a family holiday or a new car? Or maybe you want to have money kept aside in case of an emergency.
The best money-saving examples are ones that are real and relevant. But you’ll have to put what you say into practice too. That could mean telling them how much you want to buy that cheesecake, but you’d rather save more for the next family trip.
Lesson: You need to keep money aside for important things in life.
Shopping for Lessons
It can be a hard thing explaining to your kids why you can’t buy everything they pick up at Kmart, Coles or Woolworths. So, why not put them in your shoes? Get your kids involved in making your next grocery list. Talk about the budget and then, when you’re at the store, ask for their help to find discounts and affordable options for everything.
If you want to know how to teach your children to save money and keep them busy at the shops, this is a great activity. It also communicates why you can’t always buy new toys or the yummiest snacks.
Lesson: You can’t buy everything you want.
Teaching kids to save doesn’t have to be a boring experience for parents and children. For more fun learning activities, Money Smart has put together a great list of activities online. And if you’re looking for more ways to teach money-saving lessons, check out our article on Teaching Your Kids to Save From a Young Age.