There is a common belief that savings is an adult concept and not for kids. That is true because an adult should be responsible largely for their kids’ upbringing. However, that level of duty does not limit a parent or guardian from teaching their children about money and savings at an early age.
Teaching children early about spending and the need to save initiates the process of financially disciplined lifestyle. A child should be nurtured and cared for by their parents but they should be directed towards the right approach of handling money and properties. This will not make a parent “bad” or “stingy” but rather will help the child to understand reality as they grow. It also helps the parent to help raise responsible, mature and financially independent children for the future.
For me this is a lifestyle and a tool that encourages discipline and self-control, which are very crucial to succeed in life. Over the past eleven years, I have sewn the seed of savings in the lives of my kids and it starts as soon as they understand money or start babysitting or earning allowances. I would take them to the bank and open a joint account for them and they normally run it. I explain the concept of saving 60% of their income earned and they can spend the other 40% or just keep it with them. I also explain that they should sparingly spend money from that account except for emergencies. Their initial response has always been to refuse and they would question my concept. Then I remind them that it is their money and they would have access to it in the future. Once they get past the initial refusal period, they start practising the act of saving and watching their money grow. I have consistently witnessed the joy accompanied with the experience of making their $10 become $800.
As my children get older, I teach them the concept of budgeting, which is a very effective method of financial discipline. As a parent, you will know their needs and what their real cost would be. I talk to my kids about money and how important it is for them to learn to prioritize their spending. During shopping and after considering all the factors, I tell my kids how much they are entitled to spend for the day on items of their choice. They get excited as they control their purchases but then reality hits them when they get to the cashier to pay. That becomes the time of reckoning and decision-making as they have to take out some items from their cart as they realize they are over budget and they need to pay for their items. They also learn to make personal decisions such as whether to spend from their bank account which they rarely do as they have learnt to grow their money. Sometimes they would rush to me for help but with experience, they have managed to spend within limits. In effect, they have learnt to say, “I can’t afford it” and that reduces parental pressure of trying to buy all that a child wants.
Kids want everything they can convince a parent to buy and they readily call on their willing parent s to rescue them. Even where there can afford it, they would not want to spend their money. Occasionally, it is a good idea to go overboard for children as they deserve it. However, parents should not feel guilty or measure their love for their child or children based on their ability to purchase or failure not to. True parental love is showing children “how” to fish and not fishing for them, otherwise they will be not be truly independent in life. Equip them with the process of “how” such as how to help, how to grow, how to save and how to plan. In fairness, when I realize that my child exceeds their budget by a reasonable amount, I may increase their budget. Otherwise, if the item is necessary, I could buy it and give it to them as a gift during any event.
As a result, my teenagers have kept their bank accounts functioning effectively and are learning to grow their money. Some are interested in investing in the financial markets and they research these concepts and they also know about bank deals for youth savings plans. My kids have not been denied in any manner but own very valuable items because they have learnt to buy quality. They have developed a desire to be successful in life and are working earnestly towards that. They have discovered that success is a major key to sustaining a good quality lifestyle which they are aspiring for. As a parent, this has taken away the pressure of worrying about their grades or their choices and their friendships.
Teaching a person to be financially disciplined helps them in a wide variety of ways that are totally beneficial.
Mom 4 kidz