I have a kid in secondary school, one in primary and another is about 3 year old. My eldest son used to have financial control problems as he can’t really control his desire to spend all the money he has on tit bits he loves to eat, game cards he loves to own and nice stationeries he wish to have. It is a straggle for him and me trying to manage money.
It is of great concerns to guide him and the rest of my kids to let them be Money Smart Kids. I started off introducing my saving plans for my eldest son and my youngest son voluntarily wishes to do the same. Results are good and we are very happy with the change.
Many financially savvy adults have developed good money saving skills when they are very young. Children who learn the benefits of saving money will benefit them and they will have a very essential skill in life. They will know how to source for funds, maintaining funds and even expanding funds in positive way.
Ways for kids to do their savings :
1) Saving Accounts :
Open Saving Accounts for your kids as young as possible. Many local banks offer kids’ bank account. They often waive minimums to welcome these little bank customers. Some will provide incentives like giving small credit into kid’s account when they first open the saving account. Others will give attractive gifts and toys as encouragement.
2) Piggy Bank :
Encourage your kids to own a cute and small piggy bank. Let him/her choose her own bank and place it at a prominent place. Some piggy banks can produce music once a coin is slotted. There’s one bank I came across is a miniature ATM machine. You can deposit coins and notes similar to bank automatic deposit machines. There’s a smart card that will update the value so that when your kids slot in the card, it will show how much he will have. The kids will find it cool to have something similar to adult world. Of course, such bank comes with a price. You will need to spend some money before you can start saving. Thus, encourage your kids to consider wisely their budget. Ask your kids for their opinion on their choice. Once they have make up their mind, go for one that they have decided on. This will give them recognition too which is very important. Kids has pride and wants to be treated like adults.
3) Extra incentives :
Give your kids a real extra incentive when they hit their saving target. Let say, if your kid gets allowance of $10 per week and if he can save $1.50 out of it, you give him extra $0.50. He will have this weekly incentive. If he doesn’t spend the savings in the first month, he will get another $2.00 as extra bonus. This will keep your kids looking forward to hit their target and even if they do not hit the extra bonus, it will be an added advantage of fewer frivolous spending.
However, you have to stress to your kids that they have to take their meals in school. Do not skip meal just to save extra and get extra incentives. Show concern on what they eat, how they spend and how the saving going is. Guide them on the right path.
All good habits start from young. Encourage them to be young money managers. As child ages and maturity grows, they have already set their right foundation. Better investment on greater returns such as Trust, Bonds and Shares can slowly be introduced. The rest is to watch them soar and be proud parents.