Babies cry when they need to be fed or changed. It’s hard wired for them to react this way. They have no other way to signal that their needs and wants are not being met. And as we know, even at this early age, some will vent their frustration much sooner than others.
As children grow, they all need to learn how to delay their wants and needs; this is known as ‘delayed gratification’. This is all part of the process of becoming a fully functioning adult in our society. Parents will of course have an integral role to help children to develop these skills.
The art of saving money requires us to delay gratification of our wants and needs as this creates good savings behaviours . Teaching our children these behaviours while they are young, gives them a greater chance to be financial successful in later life.
By teaching kids to save for their purchases, they will realise the importance to prioritise each purchase and this will mean greater consideration of the ‘need’ for each purchase, before handing over their own money. This skill will of course help in adult life and make them less dependent on credit by practising good savings behaviours.
Our top tips to encourage kids to save:
- Remember you are your child’s role model, so you need to set good savings behaviours for them to follow
- Give your children a set allowance each week and encourage them to save part of this allowance for their desired future purchases
- Have them to do chores around the house for certain amount of money. Let them put forward ideas for some of the chores
- For older kids encourage them to offer to baby sit or wash neighbours cars or pets, mow lawns. This helps to gain a better understanding of the value of money
- Open up a bank account and sit with your child on a regular basis to track their progression to achieving their savings goals
- For younger children, under five, give them a moneybox to use. Kids are immediate and tactile creatures and moneyboxes give them lots of opportunity to see, hold and shake their moneybox so they can understand their savings are growing over time
- Set small goals to save for a purchase they would like. Be mindful that with younger kids the goals need to be realistic and very short term or they will lose interest
- Get them to draw their saving’s goal and put it on the fridge. This will be a great motivator to achieve it
- Important to let them come up with their goals so they have a sense of ownership in the process
- Make up a simple graph which shows the child their saving goal and how they are going week to week in achieving it
- Spend time with your child to research the price of the purchase and encourage them to search for the best price with an emphasis on value for money
- If they are over 10 years old when they are ready to purchase if is a large item e.g. TV or computer games/console, supervise and teach them how to negotiate for the best price at the store
- Encourage them to save for others e.g. birthdays and Christmas. Instead of always receiving gifts they can start to value and enjoy giving to their loved ones such as grandparents and siblings
- Give them positive feedback as they continue to reach their saving goal
- Share the savings goals with others such as Grandparents. They can also encourage and motivate your child to save through positive reinforcement
- Educate your teens the pitfalls of credit e.g. fees and interest.
The You Tube clip below is a TV Commercial from from John Lewis (retail store in UK) that went viral leading into Christmas 2011. It touches on many things we covered in our article with a cute twist at the end. Enjoy.
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