Children learn by watching, and when it comes to money, the lessons we teach early can shape how they spend, save, and invest for years to come. When it comes to understanding money, children are smarter than you think. According to research by the UK government's MoneyHelper service, by the age of seven, most children understand the value of money and the basic concept of saving.
Saving money is an art that takes time to master. Most children, like the rest of us, would rather spend their money on treats than save it for a rainy day. So, how do you get them to save money? Here are five simple tricks.
Buy Your Child A Money Box
The first and easiest way to teach your child about saving is to give them a money box. Pick one that is shaped like their favourite cartoon character to spark excitement and regular use. Explain that the aim is to pack it full of coins and notes from gifts, allowances, or small earnings, turning saving into a fun challenge. This hands-on approach teaches delayed gratification, goal-setting, and the thrill of watching savings grow. Furthermore, this also fosters habits like budgeting and resisting impulse buys.
“I gifted my child a money bank, and he now puts money that he earns by helping us at home, or as a reward for good grades. We open it on some occasions and let him buy whatever he wishes to with his ‘own money’ that he has saved. Now he eagerly looks forward to buying an airplane model with his savings”, said Noor Jalal, a home-maker in Dubai.
Open Up A Child Saving Account
Once your child's money box is full, you can help them learn about saving by opening a savings account in their name. Most children jump at the idea of being in charge of their own money. This will give them a sense of ownership and excitement as they monitor their balance. Providing access to banking apps, or even a prepaid debit card, can help instil responsible habits that give them a leg-up when they start to build a credit history as adults.
Practice Comparison Shopping
Give your child a set budget for an online purchase, such as a toy or gadget, and help them look through options on websites like Amazon, Noon, or local retailers in Dubai. Teach them to evaluate features, prices, shipping costs, and reviews in order to prevent impulsive purchases brought on by attention-grabbing advertisements. Exhibit the ability to compare warranties, read product labels for quality specifications, and identify discounts through sales or coupons. By doing so, they become thoughtful consumers at an early age as a result of developing wise spending habits, improving decision-making skills, and emphasising value over instant gratification.
Vartika Goel, a home maker in Dubai, said, “My son loves books, so rather than buying one every month, I gave him a fixed budget to spend in a way he likes. Initially, he had the urge to buy whatever came in his way, but with limited money to spend, he buys more sensibly now and saves money to add to the next purchase."
Lead By Example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you are out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.
“Practising is the best way to teach children. I have a small jar where I put money every week. This jar is kept in a corner that’s visible to my son, so he learns by seeing me do it,” said Simran Kaur, an IT professional in Dubai.
Talk About Money As An Interesting Subject
Money as a subject does not have to be scary to talk about. Just like we talk about culture and values to our children, talking about money matters should also be a regular conversation at home. Let your children know they can have weekly pocket money, but it’s up to them to save up for the things they really want, or spend on things that they can easily avoid. Use this moment to discuss the difference between needs and wants.
Chetna Kiran, a HR Professional in Dubai, said, “I always make my daughter earn the money she wants to spend. On her 8th birthday, I started giving her Dhs 2 every day, so she has Dhs 60 to spend on something every month. Slowly, I gave her an option to spend that money or keep it in the bank, which will give her an extra Dhs 50 every four months. I love the way she calculates the difference in the amount she can earn extra by not impulsively buying stuff."