Wednesday, 3 February 2010 09:17
We spend alot of time on this blog discussing savings habits that help us in our adult life. But how can you help your children learn good savings habits from an early age?
“Mom, can I buy this?” “Dad, I really want to get that new skateboard.” “How come we can’t eat out more often?” If you’re a parent, you probably hear questions like these all too often. And, if you’re like most parents, you’ve probably responded to them by saying things like “money doesn’t grow on trees” or “you can’t have everything you want” or that old standby, “because I said no, that’s why!”
Then you probably stopped and realized you’ve been repeating the things your own parents said to you.
Surprised? Financial experts will tell you that you shouldn’t be. Fact is, most of us have learned what we know about money from our parents – and your children will probably be no exception. They spend years watching and picking up your financial habits, both the good ones and the ones you’re not so proud about. If you give in to impulse purchases and run up big credit card bills, they probably will, too. If you fight with your spouse about money, expect to hear them do the same.
That’s why it’s so important that you start them off on the right foot by teaching them about money and how to make the most of it. And the most important concept you can share is the value of saving. You see, saving for the future (and for those “rainy days”) is the very foundation of building financial security for two reasons – it gives people a cushion for tough times and challenges, and it disciplines them to spend their money more carefully and responsibly.
One of the easiest and most effective techniques you can share with you children is the idea of paying yourself first. Most people pay all of their bills and make any other purchases, and then, if anything is left, put it into savings. Instead, teach them to put part of all the money they receive – whether it’s their weekly allowance or birthday gifts – into a savings account before they spend anything. That way, you’ll help them develop the healthy habit of saving regularly.
For information on FORUM's Aware Kids Account, click here.