Money. Why are we so reluctant to educate our kids about anything dealing with money? I think we are so afraid because we don’t want our children making the same mistakes that we have made. But what if we took a completely different approach, and actually taught our children how to actually save money? Kids that learn about finances, saving money, and budgeting at an early age are more apt to be able to handle their money than their friends and will ultimately have a better understanding of the value of a dollar.
We have to be intentional in everything that we teach our children. Sure, they learn by watching, but if we really want them to know and understand what we are communicating to them we need to be explicit in our teachings. Are our teachings going to be perfect and universally accepted when it comes to guiding our children on a path of how to save money? Probably not.
However, if we don’t at least attempt to teach our kids how to save money, then they will never understand the importance of saving.
Type into a search engine “How to Save Money” and you will be hit with a plethora of ideas on how to do just that. You will find suggestions such as build an emergency fund, create and implement a budget, use cash for all purchases, set short term savings goals, save your change, and the list goes on.
Most of these suggestions can also be used (with little modifications and tweaks) to teach your kids how to save money at an early age. You as a parent has to decide that money is something of importance to talk about with your children and be willing to do just that – talk!
I think one of the major reasons that young adults find themselves in debt so quickly is because no one has ever sat down with them and actually talked to them about money — saving or spending. Talking about money is taboo; it is something we simply choose not to talk about, because it is personal and we don’t want others knowing about our financial struggles. What does this teach our children? It teaches them to never talk about it, to never ask questions, to figure it out on their own. Even in school money is not really talked about except in technical terms – the vocabulary is taught but what it actually means to spend and save money is not really explicitly discussed or taught. It is up to us as parents to have this open line of communication with your child so that they feel comfortable talking and asking questions about money, because if we don’t — who will?
Children are notorious for asking for toys, games, movies, and other items when out shopping with you. I know I have caved and bought the item that my child was asking for more times than I have said no. However, the many times I have said know I have found an opportunity to turn this real-life scenario into a money-saving lesson for my child. I have many times told my child that if she really wanted the item that she was more than welcome to use her own money to purchase said item. In approaching this scenario this way I have found that when she really wants the item she will save her money (instead of spending it on small things here and there) and will also look, beg, and plead for ways that she can make money — she has become quite the swindler when it comes to making money. Yes, children tend to eventually spend the money that they have saved, but by setting small goals they are leaning the art of saving money which in turn will become a lifelong skill.
Children (just like adults) are less apt to spend their money when it is cash and when they do not have easy access to it. The best way that I have found to do this is to keep the cash in an envelope or in a jar. Why does this work so well? Kids don’t have immediate access to the money but it is still accessible and you can remind them that they are saving to purchase item “xyz”. This goes really well in having the child set a goal because you can constantly point out to them what they are saving to purchase and they are less apt to spend the money on trivial items. Is this a fool-proof method. No. Kids are human (just like us) and will sometimes want to spend their money on something trivial. Let them! This helps them to learn that sometimes things that we purchase aren’t actually worth the price tag. Do this enough times and your kids will start thinking twice about what to spend their money on – trust me.
Kids will never appreciate the value of a dollar if all the money that is in their name was simply given to them. I am not saying never give the gift of cash, because who doesn’t enjoy receiving cash as a gift. What I am saying is that for kids to understand the importance of saving money they need to understand that money just doesn’t appear that it is something that has to be earned. Most parents think pretty straightforward when coming up with ways for their children to earn money — make a chore chart and they earn a set amount of money for the chores that they complete — which works for some. However, I don’t think that children should be paid for things they are going to be expected to do whether they are paid for their effort or not. Let your child be creative and come up with their own ways to earn money (you will be equally shocked and delighted!). Last summer my 7 year old daughter decided that she wanted to purchase an American Girl Doll (not something I was willing to purchase), so she had to come up with her own way to save money. She cleaned out her room, asked for donations from friends and family, and set up a garage sale mostly on her own. She worked for her money, she saved her money, and spent it on what she wanted. I have also seen other kids come up with other ways to save money such as making products and selling them online, knocking on a neighbors door and asking if they have any chores they need done around the house/yard, selling items online, or setting up a lemonade stand or bake sale. Kids are way more creative than we give them credit for, especially where money is involved.
Kids learn by watching. Kids learn about money by watching. Kids learn most (if not all their behaviors) by watching what adults do. If you are apt to blow your paycheck in one setting, you are sending the message to your kids that it is okay to just spend all your money in one place. However, if you are one to save your money until it is needed or to put a percentage of your paycheck in a saving account every payday then your kids are learning that it is important to save money. Children are extremely observational creatures and like we all do they become creatures of habit.
I am aware that this was my initial point – to talk to your kids about money, but I wanted to revisit here. If we as parents do not talk openly to our kids about money – then the rest of the things we do in relation to money simply don’t matter. Be vulnerable. Talk to your kids openly about the struggles and the successes you have with money. Don’t let the subject of money become a taboo topic in your house. I think for us to truly teach our kids to save money we have to be willing to talk about it.
Learning about money is a life lesson that all children should learn. We have to be willing to talk to our children about things that are uncomfortable – even money. Kids of all ages need to learn about saving money, budgeting money, and managing money and we as parents can teach them all these things by being the example, providing them with ways to earn money, and above all else talk to our children about saving (and spending) money. Don’t let fear keep your from talking to your kids about money. Start talking to your children today and teaching them how to save money.
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