Teaching Your Kids to Save Money

Published Friday November 05 2010

No matter how old you are, it pays to be financially savvy. Children are curious about money and through observation and repetition, can be taught about it as soon as they can count. Educating, motivating and empowering children to become regular savers and investors will ultimately encourage them towards financial independence and smart financial decisions later on in life. T

o help you educate your kids about personal finance, here are 13 money management tips.

Money Management Tips for Kids

1). Talk to your kids about your values concerning money.
Teach them how to save it, how to grow it, how to spend it wisely and how to avoid the temptations of credit cards or excessive, thoughtless spending.

2). Help your kids learn the differences between needs, wants and wishes.
This will hopefully prepare them for making good spending decisions later in life. You can help them by differentiating between things that they need (new shoes for example), that they want (a new music CD) and things they wish for and would need to save for (a new bicycle or cellphone).

3). Teach them about setting goals.
Whether it's saving to go to the movies once a week or saving up for an iPod, goals will help your kids learn about the value of money and how to become responsible for it themselves.

4). Introduce your kids to the value of saving versus spending.
To demonstrate the concept of earning interest on income, you could consider paying "interest" on the money your kids save at home. This will foster a continuance of a savings plan later on in life.

Pocket Money and Spending Decisions

Receiving an allowance will give your kids a sense of independence and spending power. However, simply handing over the cash each week is not going to teach them about the value of money.

5). Give pocket money in denominations that encourage saving.
If they receive R20 a week, give them four R5 coins and encourage them to set aside at least R5 towards their savings plan.

6). Take your kids to the bank to open their own bank savings account.
Encouraging regular saving habits early is one of the keys to saving success. Just remember that you'll generally need to accompany them to open their Rate this Article: