Does it feel like your child is constantly asking you buy things for them? Whenever they get wrapped up in their latest phase it’s your wallet that always gets a work out.
“Saving is a very fine thing. Especially when your parents have done it for you.” – Winston Churchill
Look at those people out there who always seem to achieve their goals, they typically would have excellent savings habits – habits which they learnt when they were young. So it is extremely important that you teach your kids good saving habits early to set them up for a successful future.
Saving For Children: Where Do I Start?
Do you remember the moment you bought your first car? Do you remember dreaming with your friends how cool would it be to own your own apartment, parties every night, nobody nagging you to clean your room all them time – now that’s a dream worth dreaming!
The trick is to start with your kids strong desires – if they really want something badly they will extremely motivated to save for it. Children save money best when they have a focused goal in the their minds, so let them dream big – as long as they know that they are responsible for making your dream come true.
Make sure you convey to them absolute satisfaction of knowing that you have saved for something all by yourself, the feeling of independence is a feeling that cannot be replaced – its as important as the goal itself. Personally I will always remember when I bought my first car. I saved like a dog for many many months, when I finally bought it I had that feeling that I actually own something, not my parent’s but me – that was a feeling that I will never forget.
Saving For Child: Defining Goals
Get them to brainstorm the wish list, what is it they really want? Boys will typically want to save up for a car, girls may want more longer term goals like saving for college or an apartment. The trick is to get it all written down to make it real.
I would say start with baby steps, get them to practise achieving their short term goals first so they start building the habit. Short term goals might be a concert which is on next month which they must see. Perhaps there’s an awesome new computer game coming out. Short term goals are an great place to start.
Savings For Child: Making The Dream Come True
Now that your child has written down clearly what their goal is, you’re half-way there – now its brainstorming time, how are they going to save enough money to get it? Depending on the goal, your child can consider a couple of different strategies
- Work back from the target date – Let’s say the Lady Gaga concert is coming up in 2 months time. If you child knows how long she has to save up for something, then she can divide up the number of weeks to work out that she′ll need to put away $50 each week to be able to afford those tickets.
- Save as much as possible – Let’s say your son really want to buy his first car, and he wants it desperately. There will be 2 deciding factors: income, and expenditure. Try to get some extra income and spend as little as possible – he will really accelerate how quickly he can buy that car.
- A Regular Saving Plan – Ok your daughter decides she wants to buy her own place. By keeping half her income aside she will be able to calculate that she could buy a place in 2 years.
Summary
Children save money when they have a clear goal in mind, your job as a parent is to make the clear connection between achieving their goals and saving being the way to get there. If you can do this, your child will be well on their way to success.
Want to find out more about teaching kids about money, then visit David Rokhan’s site on saving for children.
{ 0 comments… add one now }
Leave a Comment