Updated: Jul 28
We live in a constantly changing and developing environment, and our children are completely taken over by technology and the multitude of things that can be done through money. That is why it is very important for the family to exercise financial education and, especially, to teach children how to save.
Many parents avoid talking to their children about money for various reasons. The most common one is because they simply don't know where to start - given that the "money" subject is hardly discussed at school. And, from our point of view, these discussions are detrimental to the development of our children's financial education.
The most important lessons and habits are learned by children before they reach the age of 7. For this reason, we decided to compile a list of ways to teach your child about savings. This way, he will become a complete adult, who can manage to save and invest in his own interest.
At what age should we talk to children about savings?
Experts suggest that it is best to talk to children about money from an early age because they will be able to understand what it is like to save through playful stories or concrete situations, from as early as 3 years of age.
As the child grows, it is good to diversify the explanations and adapt to what is familiar to him and to the notions he is able to understand at that specific age.
How do you explain the Concept of Saving to your children?
The easiest way for a parent to teach about savings is by using a piggy bank.
This will inspire your child that not everything has to happen "right at this moment". We do not always buy only what we want, but what we need and sometimes we have to postpone immediate gratification. These are general life lessons that can be used even outside the context of money.
Teach your child that they can use the piggy bank to collect the money received for their birthday and holidays or for completing various household chores. Also, mention to them that with this saved money he can buy a toy, a book, or something else they want.
The important thing, however, is to not let them wait for months to make the respective purchase, because they may get dissatisfied and not cooperate with you anymore in terms of saving.
If they happen to want something more expensive, make sure to let them know from the beginning that it will take more time for that purchase.
Now, we will offer you some more activities through which we can teach our children about savings.
Activities to help the children better understand the concept of saving:
1. Teach them to set goals.
This will make sure to keep them motivated to save.
2. Teach them to keep track of the money coming in and out of their piggy bank.
This will let them know how much money they currently have, how much he has to still save for their wishlist, and what they could buy with them.
3. Encourage them to always check their expenditure.
Many small, but accumulated amounts can leave the entire piggy bank "suddenly", empty.
4. Encourage them to keep a clear record of the money.
Show them that you have a specific budget set for family expenses and that it would be good for them to keep such a record, too.
5. Teach them the difference between cash and card money.
Namely, that when they pay cash, they will notice better how much faster money is spent.
Don't forget! The best lessons are learned from parents. So, if you have a solid financial education and use various saving methods, it will be easier for your children to understand this concept. At the same time, they will shape their money-habits according to yours.