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This Friday 12th April is designated as Teach Your Children to Save Day, a day that is all about enlisting parents to help their little ones to become more savvy with money from an early age. With only 29% of British parents saving regularly every month it’s important to address ways in which we can change this habit for future generations.
Saving money is one of the most important aspects of building wealth and having a secure financial foundation. Yet many of us have learned the importance of saving money through trial and error, and more importantly, experience.
In school, we aren’t really taught about the importance of saving and many of us find that as adults, we have to fend for ourselves. But there are ways to empower the next generation, and that starts by teaching children the importance of saving from a young age. If you are a parent, here are 6 ways to teach your children about saving money.
1. Start with a Piggy Bank
A piggy bank can be a great way to teach your children the importance of saving, while giving them an easy way to do it. Tell your children that the goal is to fill up the piggy bank with coins. Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow. We love the idea of getting children excited about the 1p saving challenge. The average household in the UK is said to have £20 worth of pennies lying around in clothes, bags and around the house. The 1p Saving Challenge demonstrates just how much you can tuck away by saving the odd spare penny. Why not take on the challenge with your little ones this half term for something fun to do?!
2. Open Up a Bank Account
Once the piggy bank is full, take your child to the bank to open up a savings account for them. Ask them to count how much money is going to be deposited, so they can have a physical understanding of how much money they have. Show them the final total and reinforce the idea of interest. It can provide a great source of motivation for your children if they understand that their money will grow over time as long as they don’t touch it.
3. Help Them Set Savings Goals
To a child, being told to save without explaining why may seem pointless. Helping children define a savings goal can be a better way to get them motivated. If they know what it is they want to save for, help them break down their goals into manageable bites.
4. Encourage Them to Track Their Spending
Part of being a better saver means knowing where your money is going. If your children get an allowance, asking them to write down their purchases each day and to add them up at the end of the week can be an eye-opening experience. Encourage them to think about how they’re spending and how much faster they could reach their savings goal if they were to change their spending patterns.
5. Lead by Example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.
6. Leave Room for Mistakes
Part of putting children in control of their own money is letting them learn from their errors. It’s tempting to step in and steer children away from a potentially costly mistake, but it may be better to use that mistake as a teachable moment. That way they’ll know in the future what not to do with their cash.
Teach Your Children to Save Day only comes once a year, but there are lessons to be learned, for parents and children alike, all year long. If you’re a parent, making saving a regular part of your child’s routine can lay the foundation for a bright financial future.
If you are looking for some financial advice and would like to speak with one of our experienced team, please contact us today.