I have always been a saver thanks to the lessons which my Dad taught me when I was younger and I am currently working on trying to teach my own kids the value of money and how to save.
Saving can help in so many different ways, it can help you to pay for big items, it can help you if you run into difficulties such as losing a job and it can also give you more financial power when negotiating things like a mortgage. The best time to start learning about the value of saving is when you are young and here are a few ways in which you can teach your kids to save their money.
I often encourage my kids to save 30% of their pocket money over the course of the month. The incentive which I offer them is that I will double whatever money they have saved in the month, on the provision that the additional money also goes into the savings pot. I know that in the real world, there will be nobody to double your savings but doing this at an early age really helps my kids to understand how important saving actually is.
I wanted to teach my kids that saving was not just some endless task which saw a number grow higher whilst they had to make do with the rest. In order to prove my point, I gave each of my kids a figure which they had to save up to, once they reached this figure, they were allowed to buy an item of their choosing, within reason, using 50% of what they had saved. I tried to get the point across which my Grandad tight me which was that you shouldn’t make a large purchase until you could afford it twice. Not only this, I think that through being able to purchase something with your savings means that you are more inclined to be inspired to save more, and purchase the bigger items in life.
My kids have had a bank account since a very young age, savings account included and I have allowed them limited access to their account as well. They cannot pay for anything or move money but they can track how much they are saving and this is something which I believe inspires them to save even more. Thankfully, a little competition has started amongst the kids to see who can save more than the other and I know that this will stand them in good stead in the real world.
Teaching kids the value of money is about handing them the responsibility and the accountability of it. Through doing this you can better educate them and better prepare them for the future. Saving is important and I have no doubt that getting this into the minds of your children from a young age is the best way to help them.