Have you explained the importance of saving to your children? Experts agree that you can teach your children about money and the advantages of saving at any age. As a parent, you do your best to lead by example, planning and saving for future expenses such as college tuition or an upcoming family vacation. So how can you teach your children to save money like you are? Here are four easy ways to encourage good personal finance habits:
1. Take your children to the store to show them the difference between needs and wants. Explain why milk and light bulbs for your family are needs while magazines and stuffed animals are wants. This is an easy way to demonstrate the importance of purchasing the items you need first and only buying the extras if there is money left over.
2. Open a savings account for your child or teen, and take them with you to deposit money when they help out around the house or earn extra babysitting money. This is a great opportunity to involve your child in the savings process and have them see for themselves how the money grows over time.
3. Teach your older children about avoiding impulse purchases. Enact a mandatory waiting period before a purchase, and ask them to research other items they could buy for the same amount of money during that time. This waiting period will encourage them to reevaluate their purchasing decision and make smart spending decisions rather than impulse ones.
4. Your children still need to learn about savings even if they have outgrown their piggy banks. Teenagers are especially vulnerable to bad spending habits since they have more freedom to splurge. Encourage your teen to apply for a part-time summer job so he or she can earn spending money and put excess funds into a savings account.
Encouraging your children to form good personal finance habits is a valuable lesson they will carry with them throughout their lives. Whether your child is still learning how to count or is doing chores for gas money, it’s never too late to help them learn to appreciate the benefits of saving.
Photo credit to oprah.com