Has saving money become a little bit easier for you? It may well have. The Fitch credit ratings agency reported recently that US and European household savings reached historically unprecedented saving levels during the first half of 2020, thanks in part to the shopping restraints imposed during the lockdown. Perhaps it’s time to share a few of the lessons learned, and help your kids to learn to save. There are lots of fun things to try when it comes to teaching kids to save money.
Teaching preschoolers about saving
Talk to them about money. It’s a tough subject, especially for young parents; during those early years, every penny counts. However, you can still discuss where money comes from, where it goes, and why you need to bring in a little more than you spend.
Set an example. Children learn by mimicking the adults around them. In today’s cashless society, it’s hard for them to see their parents saving. If you are putting money away for a family holiday, or to support your children through higher education, show them. When it comes to teaching kids to save, there’s no shame in drawing up a wall chart for your own financial goals, and Blu-tacking it up beside theirs.
Teaching primary school kids about saving
Let them make their own purchases. Allowing children a little control over their finances helps them to understand the true value of saving. They may well succumb to a few impulse purchases, but if you explain costs of buying chocolate bars or video-game currency means they can’t make big-box purchases, they’ll appreciate just how much saving can beat spending.
Celebrate when they reach a savings goal. Saving up for a new video game or Lego set sounds like a reward in itself. Still, it’s worth truly praising your son or daughter when they manage to delay a little gratification. Something simple, like a hug, a kiss and a heartfelt acknowledgement is great, though you can go pretty high-tech too. Get it right, and you can make sure saving money is fun.
Set an interest rate. Us adults can get a little extra if we save, so why shouldn’t your kids? Explain how it works, and set your own rate. They’ll improve their numbers skills, and get a taste for savings rewards.
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Teaching teenagers about saving
Teach contentment. Becoming an adult these days means coming to terms with a whole load of wants, ambitions and anxieties. Giving your teenage son or daughter some sense of contentment will help them save, and also help with their wellbeing.
A few, simple, reflective conversations can lead them in the right direction. Try asking them whether a new piece of clothing or phone handset really gave them as much happiness as they thought it would. Might they be a bit happier if they tried to want a little less, and save a little more?
Talk about saving in the olden days. Most teenagers have some historical knowledge and should be able to discuss how saving incentives has changed over time. Maybe talk to them about why setting a bit of cash aside was vitally important in, say, the earlier half of the 20th century, or back in Dickensian Britain, or when their parents or grandparents were young. Running out of money had serious consequences back then. Charles Dickens was sent to work in a boot-blacking factory at the age of twelve, after his father fell into serious debt.
If they run out of money, you can play banker, and loan them a little, while charging a little interest. This might hurt them a little in the short run, but also teach them the value of saving.