Finance Attitude - How to Teach Your Kids to Save

Oct. 10, 2017 /Kysha Wheeler/ -- Kids are a handful! There are times when they want to soak up every bit of knowledge they can find and then there are occasions when you have to wonder if they hear a word you say. Unfortunately, it is usually the very important things that they choose to ignore. This is especially so when it comes to our efforts to teach them to save. In their minds, the world revolves around them. Food is always on the table and they have never had to go without sufficient clothing. The issue therefore not only lies with teaching children to save, but also helping them to appreciate the value of a dollar. Many of the parents who have neglected this duty, now have the burden of helping their adult children pay off their mounting debts.

The key, as with most financial endeavours, is to start early. It is also of utmost importance that you be firm but loving. Giving your child an allowance is an easy way for them to begin to appreciate that money is finite or that it will run out if they keep spending. My mother often reminds me of a time when I scolded her for saying she said she had no money to buy me ice cream because in my eyes, she could always get some at the ‘free money machine.’ This idea is not new, many children assume that ATMs dispense money at random and that money will always be available.

It is also of utmost importance that the child learns early that a credit card is not the same as money; a credit card is a loan. Many parents opt to give their teenage children credit cards as a way of teaching them responsibility. Firstly, this is a huge risk and a very bad idea because there is no way to monitor their spending until after they have done some damage. Secondly, the teenage years are pivotal in teaching children to be financially responsible adults. It would be a much better idea to teach them to live without a credit card. Why not try these options instead:

1. Encourage your child to get a summer or weekend job to cover their trivial expenses like shopping or dining out with friends.

2. Ask your child to help you with the family budget. Some of them may be completely unaware of how much everything costs when compared to how little you earn. This will be a real eye opener for them and their conscience will oblige them to be a bit thriftier.

3. Help your child set age appropriate financial goals. Let’s say they want a new bicycle or to go to a special concert. Show them that how much they will need to save per week or monthly in order to reach that goal. Remember to be firm and do not give in to their pleas to buy it for them. Teaching your child to be financially responsible is much more important that satisfying their childish desires.