Tips to teach your kids how to save this National Savings Month
"More than 80% of middle-income earners lack enough savings to cover one week of expenses. That’s alarming, but also a powerful motivator to take action now," according to RCS.
July is National Savings Month, which aims to promote healthy financial habits among families and encourage them to save for their futures.
Talking to our kids about money has long been a taboo topic. Many parents have avoided it throughout generations. It might not have been something parents consciously did, but they did it unknowingly.
Many parents might not know how to educate their children because they don't understand much about financial literacy and saving themselves. Now, more than ever, it is important to teach our children how to save and mirror healthy financial habits ourselves.
"Children grow up absorbing financial lessons, whether we teach them or not. They observe how we spend, react to money issues, and talk (or don’t talk) about finances. That becomes their script," reports Moneyweb.
Check out these tips on incorporating a saving mentality in your family.
1. Money talks
This saying means more than one thing. While we know it means that having money comes with an overarching power, here we are using it in the sense that talking about money is vital if you want to change the trajectory of how your family thinks and handles money.
Talk about money with your kids. Help them understand how you work out your budget based on your earnings, spending, and savings.
2. Encourage saving
One of the most common ways of teaching children about money is to have them earn and pay for things using their own money. Get them to do chores around the house, earning them an allowance. Share your savings habits to discuss healthy savings habits. How much goes to what you want versus what you need?
Set goals for their savings based on how much they can save over a specific time. Get them to categorise their savings according to their wants, overall savings and donations.
READ MORE: Smart tips to help you save money
3. Involve them in the shopping
Allow them to be responsible for the family's grocery shopping, from planning the list to working out the budget and meals to paying for it at the cashier.
This will help them learn about spending habits, being frugal when shopping, and understanding the value of money.
4. Be a good example
While we can admit that not everyone has the best examples of managing their money, you can always choose how to change that script by being a better example to your kids. Remember, children learn through observation.
When they watch how you spend and save, they will have a model to refer to when managing their money.
5. Hold them accountable
Discuss the pros and cons of setting budgets for their wants and needs. Understanding the difference will help them become more responsible with their spending and savings. After all, we all know the repercussions of making a bad investment.
Sometimes, making a mistake and feeling the loss personally is the biggest teacher.
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