What do you do when your child is constantly harassing you to buy stuff for them?
“Saving is a very fine thing. Especially when your parents have done it for you.” - Winston Churchill
There are people in life who always manage to achieve their goals, and usually the ones that achieve their goals are experienced in saving. To become experienced in savings, people learn the foundations of their saving habits from early on when they are kids. So it is extremely important that you teach your child good saving habits to give them the best chance at success in the future - and also make sure you are not the one always footing the bill.
Saving For Children: Where Do I Start?
Do you remember imagining buying your first car? Did you ever dream about what it would be like to have your own bachelor pad, chucking parties whenever you felt like it, nobody telling you to clean your room - wow that’s a dream worth dreaming!
The place to start teaching saving for children is to start with their strong desires - the stronger the desire the more motivation they will have to save for it. Children save money best when they have that goal in the front of their minds, so let your child dream big - as long as they know that they are responsible for making your dream come true, not you.
Make sure you make them realise the total satisfaction of knowing that you have saved for something all by yourself. That feeling of independence is just as important as the goal itself. I will always remember when I bought my first car. I saved for so many months until finally I could sit in that driver’s seat. It was an incredible feeling that I actually own something, not something I would need to give back to my parent’s before 9PM - that was a feeling that I will always remember.
Saving For Child: Defining Goals
Get your child to sit down and brainstorm a list of goals, the key is to make sure they write it all down so it becomes real. Boys will typically be wanting to save up for a car, girls possibly wanting more long term goals like saving for college or an apartment.
My recommendation would be to start with baby steps, get them to tackle the short term goals first so they start building the habit. Short term goals might be a must-see concert which is on in a few months, perhaps that awesome bike that was in the window. Short term goals are an excellent place to start - make sure they write them all down.
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.
Teaching-Kids-About-Money.com have a lot of great resources. Let’s begin and invest in our children’s lives. Saving Money For Children We need to do something today for our kids!