Tips to teach your child how to save and spend
It is essential to start teaching your child about good spending habits from an early age.
Then, as they get older, they will utilize those tips and be able to make smart financial
choices for their own families. It can be difficult for a child to understand the difference
between cash and digital currency, but the earlier you start, the better chance they have
of being financially responsible.
Before your child turns seven, they should already have a basic understanding of what
money is and how it can be used. Even if you pay with a debit or credit card, explain to
your kids that you’re using money to make purchases. Show your kids the receipt so
they begin to understand that your actions are paying for monetary items.
When your children get a little older, you can introduce them to saving.
Create a short-term goal for your child, like a toy purchase, and see if they understand that every dollar
saved can go towards that goal. This also helps your child learn about delayed
gratification, and they will appreciate the purchase more because they worked hard to
purchase the item themselves.
Around the time your kids are gearing up for college, it’s a good idea to teach them
about investing and how they can get the most back from their money.
Four Tips to Teach Your Children How to Spend and Save
1. Spending: Learning what spending is and how to budget is arguably the most
essential financial skill you can teach a child. Once children realize that
purchases cost money and there is a limited amount of money to go around, they
will start to learn about the importance of being financially responsible. Children
have to learn that in order to afford everything they need to survive; they must
plan ahead and adjust accordingly based on unexpected circumstances that
arise.
2. Spending Activities: Young children can learn about spending through an at home store. Give
your child a small amount of money and create a store with
items of varying costs. This will help them realize that they cannot buy every
single item at the store and that they will need to prioritize what they want the
most. They can even save their funds to make larger purchases in the future.
When they get older, you can even introduce spreadsheets or apps to help keep
track of their spending.
3. Saving: Another important financial lesson for children to learn is saving. They
need to learn that there is a difference between saving money in an abstract
savings fund and saving money with a purpose. When kids start entering the
workforce, they may choose to save a regular percentage of their income or a
certain amount from each paycheck. Consider matching their savings with $0.50
as an incentive.
4. Saving Activities: Help your child set an attainable savings goal and make sure the
money being saved is a visual reminder. Consider having your child add money to a
jar or color in a section on a whiteboard each time they achieve a new milestone.
This visual representation is helping children start out so they can see that their
money is being saved for a purpose.
Another great way to teach your children about savings is to visit
TruPartner to open a savings account. Start your children on the right
financial path
