TEACH YOUR CHILD HOW TO SAVE

TEACH YOUR CHILD HOW TO SAVE

TEACH YOUR CHILD HOW TO SAVE

“If a person gets his attitude towards money straight, it will help straighten out almost every other area in his life.” Zig Ziglar

I indeed welcome you to Tales by Olola, an educative page where we improve on who we are and what we do. I am your loyal host, Olabusola Olorunnowo. Our focus for today is on teaching children how to save.                                                         *****************************************************************************

It is common knowledge that Parents find it easier to train their children from a very early age on how to behave in public, how to relate or dress up and who to be in life than to train them on how to save. "Based on my findings, parents seem  more concerned about the politeness of their children than their financial fitness," as explained by Ernie Almonte, CPA, vice-chair of the American Institute of Certified Public Accountants' National CPA Financial Literacy Commission.

The understanding of a saving culture will enable your children to be financially self-sufficient for life. Some parents would say “with time they will grow to learn about money” yet the children are already learning a few things unconsciously. However, it is innate in a human being to acquire things; hence as every child grows, their knowledge of money management would structure how they live, respond to wants and react to situations.

Teaching children skills for saving and responsible money management can help them avoid bad habits that can lead to a cycle of overspending and debt as they grow up and more than anything else, will groom them to being RESPONSIBLE.

Today, parents need to stress these lessons to their children from a very young age so as to counteract the onslaught of media, and the numerous advertisements of the latest gadgets, toys, games, I.T tools and the latest fashion gear targeted at the younger audience. It is important to note that advertising build desire and greed, which eventually results to expense for both young and old. Here are some guidelines for teaching kids the rules and rewards of sound money management

1. MAKE YOUR CHILDREN WORK FOR THEIR MONEY

The concept of paying your children weekly or monthly allowance is not accepted by some parents. However, it has a lot of benefits,  as this makes the child learn about money, finance, the concept of salary, wages, rewards and a whole lot more.  You may decide to start your child off from the age of 3-4 years by giving them a financial reward for some specifically assigned tasks to be completed on a weekly basis and encourage them with a small payment. 

Using the smallest denominations of your currency is advisable so as to make them know and understand the value of money and as they grow up, the allowance can be increased. You then can introduce the piggy Bank which would be opened on their birthday or on a stipulated and agreed date. For a child above the age of 3-4, you might try to make them understand that saving their weekly allowances and any other money family friends give them can help buy them desired gadgets. This would build a sense of delayed gratification. You are to explain to your children who get allowances that, they are not to spend it all, instead, the allowance should be divided into different percentages with some for tithe, charity, savings, and of course some part to be spent by them at their pleasure, but with your guide.

2. TEACH YOUR CHILD TO GIVE

Giving is one thing that some children find hard to do. It is natural for a child to just want to keep all of his or her toys to themselves; however, parents should gradually and continuously teach their children to share things, to be helpful and to give. The best way to receive is by giving.  Calvin Coolidge says and I quote, “No person is honoured for what he received. He was honoured for what he gave.” 

Saving and giving is crucial to having financial success in life, and this can be built from the cradle. Teach your children to share with their friends, to give to the needy (a charity),  to give offering in church or place of worship, teach them about tithing and help them to understand everything about giving as they grow up. They can also give their time to a positive cause. Ben Carson says and I quote,” Happiness doesn’t result from what we get, but from what we give”.  We are on earth because God gave us the earth and our breath so when we teach children to give, we are teaching them to be strong, independent and Godly.

3. TEACH YOUR CHILD TO SAVE

 Financial education builds critical skills that help put life goals within reach and strengthen the economy. Parents are advised to make financial lessons a priority in both conversation and action as early as possible. Parents need to teach children how to put away some money on a daily or weekly base for savings purpose. You can teach them the value of money by having them save their own money for things they want instead of buying everything for them. At times they can even pay for half of an item while you balance the remaining. This also builds their sense of responsibilities. 

It is good financial training practice to introduce a piggy bank for your child as early as the toddler stage. A child needs to have a Piggybank in order to understand and learn how to save.  Parents are also encouraged to open savings bank accounts for each child to enable future investment. “You must gain control over your money or the lack of it will forever control you” Dave Ramsey. Parents can also share some of the benefits they experienced as a result of having a savings culture.

4.  TEACH YOUR CHILD TO BE ACCOUNTABLE

It is important to maintain an accountability system that allows for checks and balances. Children should not spend their allowance without their parent’s knowledge. The reason for any and every expense should be discussed with their parents.  At the end of the month, children should be made to evaluate their spending by giving an account of how they spent their 4weeks of allowances and parents should correct where necessary. This would help build discipline and integrity in a child. How they use their time should also be accounted for. Time is life and time also equates money. Hence how to manage time is also essential to life and should be inculcated into them.

Also, children are to be taught how to manage their personal property and the property of others. It’s saddening when you see some children damage other children’s property and they would simply say; “how much is it, my Dad/ Mum will buy you another one”. If children grow up respecting and caring for both their belongings and that of others then they will find it easy to learn not to waste money. Parents should also teach children the sadness that comes with destroying things. For instance how they will feel about losing their toy, best clothing or gadget.

In conclusion, as a parent you are your child’s mirror, therefore you as a parent must also practice a stable saving culture to encourage such from your children. Encourage your grown-up children to read books such as The Richest Man in Babylon by George S. Clason, while you can also read it for the younger ones at bedtime. For teens, you can encourage them to read Robert Kiyosaki's Cashflow for Kids. Another avenue is to introduce instructional videos to them and these include “For Me, For You, For Later” for instance this video features music, bright colours and other things that would aid learning about money.

Thank you for your time.

 This is a little research work coming from your regular host Olabusola Olorunnowo and the E materials are below.

REF : *The cheat sheet Money instructor

             *Huff post education

Edited by Peter Odetunde.