Dad advice is usually pretty solid advice. Hopefully, it’s one of those voices of reason that our kids grow up with in the back of their mind. We teach them right from wrong, good manners, and how to treat people with kindness. Today, we are going to show you How to Teach Your Child The Importance Of Saving Money. Don’t forget the importance of starting when they are young on the importance of saving money.
Teaching your child the importance of saving money is a big one—especially if you want to feel confident about their livelihoods after they leave the nest and you feel as if you have less influence. If you started the lessons young and stuck with it, your children will grow up with a strong financial foundation thanks to good old fashioned dad advice.
How to Teach Your Child The Importance Of Saving Money
Start young. The first rule of thumb when teaching kids to save is that it’s never too early to start. You might as well equip the newborn’s nursery with a piggy bank because before you know it, young toddlers will find joy in dropping pennies in one by one. Not only is it fun for them, but as they grow they will ask questions about the little savings routine and learn something in the process. Bonus points if you take it to a bank or coin counting machine together and see how much they saved! Older kids can try to guess, making this fun and educational.
The Value of a Dollar. Another key for teaching a child the importance of saving money is to first teach them the value of a dollar. What’s the point in saving money if you don’t understand it? Encourage even young children to earn money whether it be helping around the house or in the yard. Once they realize what it takes to earn and save up $10, help them put this into perspective with a walk through the toy aisle!
Don’t be afraid to tell your children while out shopping at the grocery store that the money for that trip is intended for groceries, and there isn’t a budget for new toys at that moment. It’s not about whether or not you have the money, it’s about how you spend that saved and earned money and reinforcing the value of a dollar with kids. A grasp on this from a young age will really come in handy when they are figuring out how to manage their own money one day.
Rainy Day Fund. A famous piece of dad advice is to save for a rainy day. This concept can be hard for children who tend to want something the instant they see it. To help teach your kids about saving for a longer term goal or even a “rainy day,” help them build a savings plan and keep their eye on the prize. If a new bike is the plan, they may need to save up birthday money and chores money for several months. To stay focused, print off pictures of the purchase they are working towards or make a savings chart where you can color in a block for every $10 earned, etc.
Motivation. Speaking of saving up for a toy, it’s important as parents to allow children to want. If they are given every toy and game under the sun before they even have they chance to want it, they will have zero motivation or reason to save money. If they are just begging for the newest toy, harness that excitement and encourage them to focus on saving. You’ll be doing them so many more favors in the long run with this approach verses giving them so many toys they don’t even appreciate.
Open an Account. There’s another thing that it’s really never too early for when it comes to teaching your children the importance of saving money, and that is a bank account! Most banks will offer kid’s accounts or kid’s clubs with special incentives for the youngest of savers. Plus this is a great place to save that cash the grandparents like to contribute towards the college fund. Allow your children to become familiar with coming into the bank (suckers!), making deposits, and getting comfortable with the process.
Many mature teenagers and even preteens (you know your kids best) are ready for checkbooks or debit cards with your supervision. This doesn’t need to be something they wait until leaving the nest to learn to handle.
Offer Incentives. Dads are pros at scouting out the best interest rates when it comes to saving their own money. Many times the interest earned is one of the main reasons we choose to save in general. When teaching your child the importance of saving money, offer them the same perks banks offer us—interest. If your son has just completed a lawn mowing job and has $40 burning a hole in his pocket, he may be more likely to save it instead of spend it if you are there to offer a little incentive. If his $30 earned can become $35 saved with dad’s special interest rate, he just scored big! Dad’s rates may be a little sweeter than the real world, but this is a great way to encourage the habit of putting money back.
Some parents go as far as helping their kids set up a savings fund that they will match when the kid is ready to buy a car or when they turn 18. Pennies saved here and there feel a lot more meaningful when you know the dollar amount will double at cash out time! No matter what you decide on, a little interest incentive can be very beneficial when you teach a child the importance of saving money.
So dads, help prepare a new generation of adults be self-sufficient and prepared for whatever rainy day may come their way. Whether its chores or piggy banks or dad’s 10% interest rate–it’s never too early to teach your child the importance of saving money. Not only will you be confident to send them out into the world, but this is one of those life lessons they’ll look back and thank their dad for, for years to come.
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