Ally is going to give me some advice about how to encourage Eliza to save money, and I thought it might be of use to you as well. We can all do with a little bit of advice on how to save money, and it might even apply to those who don't have kids too. Thanks Ally :)
Kids are naturally a bit short-sighted when it comes to things they want, from the candy bar at the checkout counter to the shiny new bicycle in the window of the nearest toy shop.
Unfortunately, because money management is such a difficult topic, and one that many adults still struggle with themselves, some parents tend to avoid the subject with their kids. However, while children should never be involved in complicated matters like bills and credit card debt, allowances can provide the perfect opportunity for money saving lessons.
1. Don’t give out more money once the weekly allowance is finished
Giving out more money after the allowance has been spent will only teach your child to live beyond their means. Explain that since they spent their whole allowance on the weekend, they won’t be able to afford any extra treats for the rest of the week and will have to wait till next “payday.”
2. Set up a goal chart
Children need motivators, and unless they can clearly see their progress, they will lose interest. Create a simple goal chart that tracks their progress and outlines how much they will still need to save in order to afford that new toy or video game.
3. Use different savings jars or envelopes for different goals
If your child has a few things they are interested in saving up for, you could use different piggy banks or jars that are labelled with both the name of the item they are saving for and the amount they need in order to purchase it.
4. Offer extra little rewards for chores around the house
Learning that money doesn’t come for free is another important part of learning to save. By allowing your child to take out the trash or help out with the dishes in exchange for some extra pocket money, you can help them to understand that money must be earned.
5. Take your child bargain hunting
Taking your child out to different stores to look for the best deals will teach them to be careful with their money and not spend it all in the first shop they walk into.
6. Help your child differentiate between needs and want
If a child can tell the difference between things they really need and things they just want, they will be able to identify what their priorities should be.
7. Help your child open a savings account
Don’t let the bank remain an ominous and unfamiliar environment to your child. Help them to open a savings account as soon as possible and teach them about how things like interest and ATM cards work.
8. Help your child recognize real value over marketing hype
Marketers start targeting kids from an early age, but helping your child to recognize the good deals over the ones that are simply hyped up to seem better than they actually are will help them to become savvy spenders.
9. Don’t tell your child what they can or can’t do with their allowance
Even if you see that your child is on the brink of making a bad money decision, don’t stop them from making that decision. In the long run, mistakes are often more valuable than good decisions, and it is better to let them try and fail now, than later on in life when they have more to lose.
10. Set an example
This is another case where the saying “practice what you preach” is applicable. If you are not setting a good example for your child, you will have a difficult time getting them to see the importance of saving their money.
Ally is part of the team that manages some of the most successful personal finance sites in Sydney, Australia, which provide useful tips about Budget Planner & How To Save Money Fast. Before joining the team, she was a Media Planner in McCann Worldgroup Philippines, Inc., wherein she had the opportunity to work on several innovative and globally recognized projects.
Kids are naturally a bit short-sighted when it comes to things they want, from the candy bar at the checkout counter to the shiny new bicycle in the window of the nearest toy shop.
Unfortunately, because money management is such a difficult topic, and one that many adults still struggle with themselves, some parents tend to avoid the subject with their kids. However, while children should never be involved in complicated matters like bills and credit card debt, allowances can provide the perfect opportunity for money saving lessons.
1. Don’t give out more money once the weekly allowance is finished
Giving out more money after the allowance has been spent will only teach your child to live beyond their means. Explain that since they spent their whole allowance on the weekend, they won’t be able to afford any extra treats for the rest of the week and will have to wait till next “payday.”
2. Set up a goal chart
Children need motivators, and unless they can clearly see their progress, they will lose interest. Create a simple goal chart that tracks their progress and outlines how much they will still need to save in order to afford that new toy or video game.
3. Use different savings jars or envelopes for different goals
If your child has a few things they are interested in saving up for, you could use different piggy banks or jars that are labelled with both the name of the item they are saving for and the amount they need in order to purchase it.
4. Offer extra little rewards for chores around the house
Learning that money doesn’t come for free is another important part of learning to save. By allowing your child to take out the trash or help out with the dishes in exchange for some extra pocket money, you can help them to understand that money must be earned.
5. Take your child bargain hunting
Taking your child out to different stores to look for the best deals will teach them to be careful with their money and not spend it all in the first shop they walk into.
6. Help your child differentiate between needs and want
If a child can tell the difference between things they really need and things they just want, they will be able to identify what their priorities should be.
7. Help your child open a savings account
Don’t let the bank remain an ominous and unfamiliar environment to your child. Help them to open a savings account as soon as possible and teach them about how things like interest and ATM cards work.
8. Help your child recognize real value over marketing hype
Marketers start targeting kids from an early age, but helping your child to recognize the good deals over the ones that are simply hyped up to seem better than they actually are will help them to become savvy spenders.
9. Don’t tell your child what they can or can’t do with their allowance
Even if you see that your child is on the brink of making a bad money decision, don’t stop them from making that decision. In the long run, mistakes are often more valuable than good decisions, and it is better to let them try and fail now, than later on in life when they have more to lose.
10. Set an example
This is another case where the saying “practice what you preach” is applicable. If you are not setting a good example for your child, you will have a difficult time getting them to see the importance of saving their money.
Ally is part of the team that manages some of the most successful personal finance sites in Sydney, Australia, which provide useful tips about Budget Planner & How To Save Money Fast. Before joining the team, she was a Media Planner in McCann Worldgroup Philippines, Inc., wherein she had the opportunity to work on several innovative and globally recognized projects.
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