You know the saying, “give a man a fish and you feed him for a day, but teach him how to fish and you feed him for a lifetime?” The same applies to your own kids—while it’s easy to spoil, coddle, and shower them with absolutely everything their heart desires, it will be better for them (and you!) in the long run if you instill in them the value of saving.
Teaching kids how to be smart with money doesn’t happen overnight. We asked different parents how they school their kids in the proper way of money management.
1. Give them a piggy bank. Jen, a stay-at-home mom to two boys under seven, shares that she teaches her kids how to save by encouraging them to use piggy banks. “They come in cute designs, so using them doesn’t make it seem so boring,” she says. So buy them a piggy bank and encourage them to put in coins as often as they can.
2. Help them set a savings goal. You won’t only teach them to save, but you’ll also teach them the value of delayed gratification. Ask them what they really want to buy, and use that as a goal for what they’re saving up for. Jen even gets creative by posting a picture of the toy or book her child wants on the piggy bank.
“Whenever they want to get money out of the piggy bank to buy something else, they’re constantly reminded of their savings goal,” says Jen.
3. Teach them how to budget. Dan, an events planner, taught his kids the value of budgeting at an early age. “We’d walk into a toy store and I’d tell them they could pick whatever they wanted, as long as it was P200 or below,” he said. “If they wanted to buy something more than that, they needed to use their own money.”
Teaching kids the importance of sticking to a budget can be tricky, and most parents find it time-consuming: after all, kids can spend hours in a toy store comparing toys to see which will give them the most bang for their buck. But be patient with them. These are crucial, money-management learning times that will surely help them when they’re all grown up.
4. Know when to “rescue” them. Living on an allowance can make it impossible for a child to purchase the toy they really, really, must have. Because of this, moms like Pamela, an advertising account director, makes a deal with her kids to “split” the costs.
“I tell them that I’ll pay for half of the toy. That way, they still realize that they have to save for it,” she says.
5. Help them open a savings account. Many banks offer kiddie savings accounts, and it’s always a good idea to let your little ones familiarize themselves with banks at an early age. “My kids love the idea of having their own passbook,” says Pamela. “It makes them feel so grown-up!”
Help encourage them to save birthday and Christmas money by letting them deposit cash and checks themselves. Nothing makes them feel like a grown up as doing over-the-counter bank transactions.
Savvy Living asks: How did you learn about managing your money when you were growing up? How would you teach your own kids about money and saving? Share it with us in the comments section below.