Saving money is one of the most important aspects of building wealth and having a secure financial foundation. Yet many of us have learnt the importance of saving money through trial and error, and more importantly, experience.
As adults, it is important to inculcate the culture of saving into our young ones so that the habit will stick with them as they grow; and there is no better time to do this than this summer because this is when we’ll be spending more time with them. If you are a parent or a guardian, here are 5 ways to teach children about saving money.
1. Start with a Piggybank
A piggy bank can be a great way to teach your kids the importance of saving while giving them an easy way to do it. Tell your kids that the goal is to fill up the piggy bank with some Naira notes until there is no room. Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow.
2. Open a bank account
Once the piggy bank is full, take your child to the bank to open a savings account for them. There are commercial banks in the country that have accounts specially designed for children. So, have them count how much money is going to be deposited, so they can have a physical understanding of how much money they have. Show them the final number and reinforce the idea of interest.
It can provide a great source of motivation for your kids if they understand that their money will grow over time if they don’t touch it.
3. Use savings jars
When your kids really want the latest toy or a new action figure, let them know they will have to save up for it. Give them a jar for each of their desired purchases and offer them a small allowance each week in a denomination that encourages savings.
To encourage saving up for their short-term goals, put a picture of their desired toy or item on the jar, so they have a visual reminder of what they are working towards.
4. Lead by example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.
5. Start a conversation
One of the most important things you can do is to start a conversation about money and the importance of saving. Money doesn’t have to be scary or a taboo. Use financial discussions as teachable moments. An innocent question such as “Are we rich?” can be answered in a way that emphasizes family values, such as hard work and responsible spending.
Let your children know they can have an allowance, but it’s up to them to save up for things they really want. In addition, illustrate how much their money can grow over time if they save.
Teaching kids how to save money may seem like a tough task. It has even been said that parents are more likely to talk to their children about sex than about money. But using these tips, you can make your child’s understanding of money fun and accessible. It’s an investment in knowledge which truly pays the best interest.
For more financial tips, you can call Old Mutual on 01 271 9393 to arrange a free financial education session for your team, group or organization. Our Financial Advisers can help you with the right kind of financial and insurance advice. For more information, visit your nearest Old Mutual branch or go to www.oldmutual.com.ng or follow our social media pages @oldmutualng on Facebook and Instagram and @oldmutual_ng on Twitter. We look forward to helping you with your money matters.
