Teaching kids healthy money habits for savings month
We live in a time of financial uncertainty, so there's no better time to educate your kids about money management.
Teaching kids about the value of money is no easy feat. Kids don't have to think about where things come from until much later in life, so they don't understand the cost of living, affordability, and the value of saving.
All they know and think about is what they want and getting it. It's natural for parents to want to give their kids the best. When one generation feels they want to give their kids more than what they had growing up, this can be described as generational progress.
However, some experts say this may not benefit your kids in the long run.
Matthew Marrian from Moneyweb says: "Children grow up absorbing financial lessons, whether we teach them or not. They observe how we spend, react to money issues, and talk (or don’t talk) about finances. That becomes their script."
He goes on to say that if all kids see are their parents "spending without context", they will conclude that money is limitless. "If they witness conflict over money but never hear how budgeting works, they associate money with anxiety. If they’re left out of financial decisions altogether, they grow up unprepared to make their own," says Marrian.
Read more: Save Smart: 10 Money saving tips
Therefore, more and more parents are adapting their relationship with money and trying to teach their kids about the value of money in new and innovative ways.
July is National Savings Month. This month aims to encourage households to be savvy in their saving habits.
Here are some ideas for teaching your kids financial literacy and, most importantly, to save.
1. Talk about money in healthy and open ways
Instead of steering away from the topic or saying you don't have money, it's better to explain to kids what a budget is and how you work it out based on your income. Educating them on how you split the money based on the family's lifestyle and needs will help them understand the value of things.
2. Use savings jars or envelopes
Give them age-appropriate saving goals and link them to chores or tasks so that they understand the concepts of budgeting for spending, saving and donating.
Visually setting out goals for them with jars or envelopes will help them understand how the money is being split. It also allows them to enjoy the benefits of seeing their money in jars or envelopes growing.
3. Teach them the difference between wants and needs
Children struggle to decipher between what they want and what they need. By encouraging saving habits, you can help them set savings goals for things they want, like toys, games, treats, etc. and open their minds to things they need, like food, water, clothing, shoes, etc.
4. Set milestones for their savings goals
This can be a family affair. Set savings goals, and when goals are reached, celebrate them. A unique sense of gratification comes with reaching a goal, especially a financial one. Once they reach a goal, follow through and let them spend their money on something they wanted or better, on giving - donating to a cause.
5. Lead by example
Kids mimic the behaviours they see in their parents. If they see you being careless with your spending, they will mirror your behaviour with their money. Practice conscious spending and budgeting.
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