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#Savings&U

11 Feb 2016

5 easy money lessons for kids

by RAKBANK
Kids_saving

Good habits are essential for attaining success as they help us stay focused. They allow us to do the same action repeatedly until we achieve perfection. One such good habit is the habit of saving money and you, as a parent, can play an important role in introducing this habit to your children. Understanding the importance of saving money will go a long way in making your child financially disciplined and stable.  

 

While there is no ideal age to inculcate the habit of saving in your child, it can be taught slowly once the child turns five. From that age, the child begins to understand concepts and would like to practice whatever he/she is being taught.  

 

Given below are a few tips to get you started:

 

1) Storytelling: 

Remember the story of the ant and the grasshopper. The story talks about one summer when the ants toiled hard and gathered food while the grasshoppers sang songs and lazed around. When winters came, the ants had enough food to last the entire season, but the grasshoppers were left hungry and cold. Stories such as these can help your child understand the value of keeping something for the future i.e. the value of savings. 

 

2) Get them involved: 

When you are shopping, ask your kids to compare prices and show them how you make your day-to-day financial decisions. Questions such as "Is it better to buy a pre-packed bag of apples or loose ones?" or "Should you order a big water bottle or individual smaller bottles?" will get them thinking. As they "help" you in making your financial decisions, they will become aware of the small differences in prices early on, enabling them to make better financial choices as they grow up. 

 

3) 3 jars concept: 

Ask your children to prepare three jars respectively and label them as "saving", "spending" and "giving". Let them divide their monthly allowance and earnings in these three jars. Then, when they see a toy they want, don't automatically say "no". Have them look at the price and let them decide if they want to use the money from their spending jar to buy the toy, or save for it in their saving jar.

 

4) Let them earn (at home):

Divide household chores into paid and unpaid tasks. While all family members should have unpaid tasks assigned to them, the kids can be given the option of earning extra by completing some of the paid tasks. For example, vacuuming the car, cleaning the garage, cleaning the bathroom, etc. The only condition is that the unpaid tasks need to be completed before the paid ones.


5) Saving chart: 

Prepare a chart that shows how much your children can save per week or per month. Encourage them to save around 10 percent of their pocket money. Further, you can set up an earnings record book for them so they can keep a track of their earnings and expenses. 

 

Try and be a positive role model for your kids as they learn a lot through observation. Let them understand the time and effort that goes towards earning money, so they can understand the value of money. An open and engaged conversation with your children about money, will help them understand the logical process behind spending and saving money and will prepare them for a financially secure future. 


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5 easy money lessons for kids

11 Feb 2016

Kids_saving

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Good habits are essential for attaining success as they help us stay focused. They allow us to do the same action repeatedly until we achieve perfection. One such good habit is the habit of saving money and you, as a parent, can play an important role in introducing this habit to your children. Understanding the importance of saving money will go a long way in making your child financially disciplined and stable.  

 

While there is no ideal age to inculcate the habit of saving in your child, it can be taught slowly once the child turns five. From that age, the child begins to understand concepts and would like to practice whatever he/she is being taught.  

 

Given below are a few tips to get you started:

 

1) Storytelling: 

Remember the story of the ant and the grasshopper. The story talks about one summer when the ants toiled hard and gathered food while the grasshoppers sang songs and lazed around. When winters came, the ants had enough food to last the entire season, but the grasshoppers were left hungry and cold. Stories such as these can help your child understand the value of keeping something for the future i.e. the value of savings. 

 

2) Get them involved: 

When you are shopping, ask your kids to compare prices and show them how you make your day-to-day financial decisions. Questions such as "Is it better to buy a pre-packed bag of apples or loose ones?" or "Should you order a big water bottle or individual smaller bottles?" will get them thinking. As they "help" you in making your financial decisions, they will become aware of the small differences in prices early on, enabling them to make better financial choices as they grow up. 

 

3) 3 jars concept: 

Ask your children to prepare three jars respectively and label them as "saving", "spending" and "giving". Let them divide their monthly allowance and earnings in these three jars. Then, when they see a toy they want, don't automatically say "no". Have them look at the price and let them decide if they want to use the money from their spending jar to buy the toy, or save for it in their saving jar.

 

4) Let them earn (at home):

Divide household chores into paid and unpaid tasks. While all family members should have unpaid tasks assigned to them, the kids can be given the option of earning extra by completing some of the paid tasks. For example, vacuuming the car, cleaning the garage, cleaning the bathroom, etc. The only condition is that the unpaid tasks need to be completed before the paid ones.


5) Saving chart: 

Prepare a chart that shows how much your children can save per week or per month. Encourage them to save around 10 percent of their pocket money. Further, you can set up an earnings record book for them so they can keep a track of their earnings and expenses. 

 

Try and be a positive role model for your kids as they learn a lot through observation. Let them understand the time and effort that goes towards earning money, so they can understand the value of money. An open and engaged conversation with your children about money, will help them understand the logical process behind spending and saving money and will prepare them for a financially secure future.