If there’s one lesson that can be learned from these hard times, it’s that we should know how to save for a rainy day. And who better to impart these valuable lessons on money than to the very individuals who will one day be benefiting from what little (or much) we have? Our kids, of course.

Even a preschool child is old enough to understand a thing or two about money. As soon as he can count, why not let him count all the way to a piggy bank? While we expect schoolteachers to teach our kids the concepts of addition and subtraction, basic money-management training is something that parents are in the best position to pass on to their children.

Why is this important? Two reasons: If you are fortunate enough to weather the tough economy, you are definitely doing something right. Wouldn’t you want your kids to be able to do the same when the time comes? In contrast, you may also be up to your ears in debt and constantly juggling finances to make ends meet. It is even more important then that you have your children avoid the pitfalls that you are going through.

Sounds like a tough job? Think again. The task is not as difficult as it seems and you may even find yourself lightening up about money issues along the way. After all, anything viewed from a child’s perspective, shouldn’t cause too much stress.

Here are a few things that can help your little tykes grow up to be big savers:

  1. Introduce your child to the concept of money. No fancy lecture – just the basic understanding that things have monetary value and do not come for free, and that one needs money to be able to acquire them.
  2. Teach him how to save. When he already has an idea of what nickels, dimes, and bills are, slowly inculcate him into the habit of putting something aside as savings. A piggy bank is a good place to start building up a kid’s savings.
  3. Help him earn enough to have some savings. The process of learning to save can be hastened when he is able to earn income for himself. Nothing works better than on-the-job training. Assign your kids some tasks around the house for a corresponding “salary”. This will encourage him further to save since the money has been hard-earned.
  4. Progress from the “piggy” to the actual bank. Give your kid a taste of the “real world” by taking him to the bank and opening a joint account with him. Elementary school children can already be taught the concept of an interest and you can watch the money grow together.
  5. Help him spend (part of) his money. The beauty of saving is never more felt than when he is able to enjoy the fruits of his patience. It is best that your child already has a specific goal in mind so that when the savings is enough, the reward will be all the more sweet.
  6. Point him to some age-appropriate literature on saving money. Even for preschoolers, there are some pretty fun story books out there that were written specifically for introducing young kids to the value of money. You’ll be surprised how entertaining your kids will find them.
  7. Invest a nominal amount into “kid-associated” stocks. Much like following a much-loved cartoon series, you and your older kids can also follow the progress of some stocks that you can buy for him. You can try companies that kids can easily identify with like McDonalds (NYSE:MCD) or Mattel (NYSE:MAT).
  8. Let your good money habits rub off on your kids. If you have good budgeting skills, or can always manage to put something aside for savings, let your kids learn from these practices. It won’t do them any good if you spend money like there’s no tomorrow, or if they see the credit card as a sort of “genie” for the better things in life. Lead by example and your kids will be well-equipped for a financially stable future.
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