Before thinking of encouraging your child to open up a savings account under their name, check their level of understanding first. What is it that they do not understand about money? Is it about money itself or the things that they can do about money? The moment you pinpoint the value of money based on how it can be used, they will get the logic of saving for the rainy days. The truth is, there isn’t a bad time or good time to start teaching your kids how to manage their money well.
As parents, you can’t be around all the time for your kids to help them make financial decisions that could impact their future. Here are some of the top reasons why you should start educating them about money now:
5 Smart Ways to Teach Kids about Money
● The ATM is not unlimited.
Online banking apps and bank statements can show how much cash is stashed and how much interest it has garnered since it got stored. This will make kids think that the only reason their parents can get some dollar bills out of that ATM is that they have money stored weeks or months ago. Once it is their turn to open up a savings account of their own, they will understand that for they have to keep the money in there for quite some time for it to earn interest, and they can’t just go about splurging it all on unnecessary things.
Some parents find the best savings account for baby early on and others have to allot some time for research. But if you’re really determined to help your kids make wise financial decisions, you will compare banks and the benefits that come with savings accounts such as top-ups or insurances.
● Save now, buy later.
There are expenses at school that your kid can’t avoid like snacks or school-related projects. If some of them have experienced not having any money to buy a new pencil or pieces of bond paper because they “accidentally” splurged on the latest gadget, you can go the “I told you so” route and remind them about the importance of saving for more important expenses.
● They don’t have to fear missing out.
Kids have this tendency to start buying the latest Pokemon pencil case or the latest Pikachu phone cover because all of their friends at school have it. Then they realize that they still wanted to buy the latest console they saw on Amazon because the neighbors’ kids have them. Educate your kid that they won’t miss out on life’s best experiences even if they don’t get the same things as other kids.
Always remind your kids about their priorities. Let them choose: phone cover now or console a month from now? Kids are not as innocent as they seem to be, and if they can manipulate you into buying things that they don’t need, they won’t give them value. Mom or dad can buy new ones after all, right? Also, they themselves are convinced that they only want those things because they saw others having them and enjoying them.
● The earlier they understand money, the better.
Some of the best savings accounts for baby have a clear-cut, easy-to-read money journal. So easy to read, even kids can copy the format used to monitor the cash flow. Knowing how much money is saved compared to how much money is spent helps children think twice about their next purchases. They become less dependent on you financially, and you boost their money-saving skills through monetized positive reinforcement.
Again, the earlier you expose them to these things, the more mature they will be in managing their money.
● Make them feel excited about hitting goals.
The best coin banks are containers that are transparent for kids and adults alike to see how many coins have been set aside at the end of the day. If your kid has a daily allowance, chances are, he or she won’t spend it all so loose change can be put into the jars until they get full. Develop their habit of saving. Once 3 or more jars are filled, your kid is ready to open up an account under their name.
Which tip do you think is most applicable to your kid? Just remember, it may be hard to change their ways on the onset, but don’t give up. Your goal as a parent is to make them independent and wise in the future, so getting them started early on has lots of benefits.