While the majority of American adults say they always try to save, most admit they don’t save enough. Even though a large percentage of individuals have the intentions of saving money, very few are saving the amount that they said they would.
Considering the inconsistency of the economy, pushing for responsible spending habits in children can be beneficial in more ways than one.
However, children aren’t going to learn anything about proper spending if their parents can’t be spending role models. As parents, it’s important to utilize every resource for teaching your children how to save money. Here’s everything that you need to know to start.
The earlier you can start explaining money to your kids, the better. At ages three to five, a child can typically begin understanding the concepts behind money and saving it. The main lesson should be that sometimes, one must wait to buy what they want.
At this age, it’s important for children to realize that if they really want something, they need to save up in order to get it. By being open with money to your kids and providing examples of saving for them to emulate, it’ll be easier to instill good values on them.
Think Like Monopoly: Teach Children With Fake Cash
Another great way to explain the concept of money is through giving children fake money, particularly if you’re not ready to give them real money just yet. When they want to buy stuff through you, that time can be used to explain money and why certain things cost more than others.
Don’t Spoil Children With a Credit Line
Don’t open a line of credit for your children too soon. As kids get older, it’s important to teach them that only they are responsible for how they spend money.
What they earn is what they can spend, essentially. When there’s limits, it’s a lot like real life. Teaching children that they can go to their parent whenever they need money is exactly what a parent doesn’t want or need. So if your kid’s chore for the day is to do the dishes, make sure they are “paid” accordingly for their labor.
Whether it’s an app or simple chores and a calendar, there’s more than one way to teach kids the importance of responsible spending. The older they get, there’s going to be more expenses to worry about. The end goal is to have your children completely set with solid financial habits before they leave for college or the real world.