Parents should teach their children about saving from a young age. This will encourage them to save when they are older. If you aren’t sure where to start, follow these three tips:
Tip 1: Want vs. Need
Our basic needs include food, shelter, clothing, health care, and education; these are non-negotiables. Any additional extras or ‘nice to haves’ is a want – typically something we save up for.
Tip 2: Save toward a goal
Teaching your child about saving is easier when they are saving towards a goal. If they want to buy a new game, talk to them about how much of their allowance they have to put away on a weekly or monthly basis and how long it will take to save that amount. If it is a big goal that they are saving towards, consider matching their contribution.
Tip 3: Age-appropriate saving
Consider your child’s age. If your child is younger, consider using a piggy bank or jar so they can physically see the money accumulating. You can open a bank account in their name and pay money into their debit card if they are older.