During Christmas, kids are eager to get new presents from you. Instead of just caving into their request, why not teach them how to save money for those presents? Here are some useful tips on how to get the little ones saving coins and bills to get the toys and trinkets they want.,
Teach the basics of how to save money
For your kids to get into the practice of saving money, you need to teach them early why it is important. The first concept you should discuss with them is that of needs vs. wants. Explain the difference between the two using simple analogies they encounter every day. For instance, you can explain why vegetables and other healthy foods (needs) are more important for them than sweets (wants).
It is also important to teach them patience when saving up for the things they want. This can be a bit of a hard subject to grasp for younger kids but it will have a significant impact on their later financial decisions. As is with the above, teach this to them using scenarios they encounter. You can, for example, explain why they can’t buy that toy they want right now and instead wait until they have saved enough money.
Teaching kids how to make a budget
Another essential concept you should remind kids of is that money is finite and that they need to spend it wisely. Explain how you earn the money that you use around the house. You also need to explain why you earn only this or that amount of money.
When teaching them about the concept of budgeting, use your home budget as the main example. This way, they will have a clear idea about how the money goes around and where the money used to buy their wants come from.
Later on, you can get them involved in the actual budget-making process and apply what they have learned. Making them part of the spending process is also a good idea. When going to the grocery, for example, you can let them select the cereals to buy based on the price.
Small steps to build your kids’ savings
After all the lessons about how to save money, it’s time to get them doing it in practice. A simple piggy bank is always a good start. Your goal here is to get them to put coins into the piggy bank until it is full. Start with small changes left over from different purchases. Once they get accustomed to the idea, you can then set an amount that they must set aside every day.
Take this to the next stage by creating savings jars. Each jar will be labeled with the specific item the money in it would be intended for, such as a toy or a certain dress. Get started by giving them a small allowance that they can decide on where to put among the jars. Give this allowance as small bills or coins so they can choose whether to put everything in a single jar or divide it into different ones.
Opening a bank account
Eventually, it would be a good idea to teach your kids how to open their own bank accounts. This will let them save larger amounts and keep track of their money easier. It will also help them become more conscious about managing their money.
Most banks in the country offer kids savings programs that make opening accounts and using them easier for little ones. Some of the popular ones are:
- BDO Junior Savers: If you have an existing BDO account, you can easily transfer funds to your kids’ accounts.
- BPI Jumpstart Savings: It has a Guaranteed Savings feature that protects a portion of your kid’s money from unintended withdrawals.
- Metrobank Fun Savers Club: Offers discounts for purchases made on Metrobank partner establishments.
- PSBank Kiddie and Teen Savers: This one has no minimum maintaining balance required, so you don’t have to worry about charges.
You can sign up for any of these kiddie savings accounts at the nearest branches. When determining which ones to go with, consider the features and the convenience it will bring to your kids. Being able to quickly transfer funds, for instance, will be handy when managing their allowances.
Teaching kids how to earn money
An important part of teaching kids how to save money is letting them earn their own. Start by paying them for small chores. Make it a regular one so they would be better encouraged. Also make sure that you pay them fairly for the tasks they do. If you have several kids, divide the chores evenly between them so that they don’t try to compete with each other.
Help them track their earnings by making a weakly accounting chart. List the target amount for each item they are saving for and how much they earned so far. It would also be a good idea to talk about their spending habits and help tell them how fast they can reach their ipon goals by changing those habits.
Build your kids’ savings these holidays
Teaching your little ones how to save money is not just about helping them buy this or that toy. The activity also teaches them a lot of useful life lessons they can use later on. Get started early and your kids will be thankful for the effort