Teaching kids to be smart savers shouldn’t just be about instilling saving habits into them and helping them to start piggy banks, but also, influencing them to grow up as conscious spenders of money. If they spend wisely, they’ll have something to save besides what they, on their own, intend to save at all costs to increase their savings as smart savers.
Detailed below are four simple tips on how to teach kids to be smart savers.
1. Introduce them to personal finance
In as simple words as possible, explain the concept of personal finance and its necessity to your children and help them to identify needs from wants.
Tell them that wants may be consumables that they see advertised on TV or somewhere and feel like buying simply because they have the money (not that they really need them) or think that dad or mom has a bank account with limitless funds. Teach them that needs on the other hand, are consumables that they need to have to survive and may buy if they have the money.
2. Teach them the importance of saving
After introducing them to personal finance, now’s the time to teach them the importance of being smart savers. How to do that?
If they ask you to buy something that’s obviously expensive, tell them you can’t afford it but will buy it for them if they can help you do so. Ask them to start saving a little of their allowance or any money they lay hands on and if it reaches a certain amount, you’ll add yours to buy that particularly needed thing for them. It won’t take long for them to realize the importance of saving money.
3. Introduce them to banking
Piggy banks are great (and also useful for saving any money kids lay hands on) but real banks are greater. Most banks will pay interests on bank accounts opened for children below 18 years but never charge interests on them; hence it’s wise to take advantage of this opportunity to help your children become smart savers.
Explain to them that money kept within sight or in a place you can have easy access to is not as secured as saving in a bank. Of course, they can continue using their piggy banks and then transfer any sizeable amount into their bank accounts.
4. Be an example
Kids naturally copy their parents and will want to imitate anything about you. Thus, if they see you spending less on impulse items, saving money at home and managing your resources very well, they will make up their minds to be like you and become smart savers.
Be an example and influence them to become smart savers like you.