A penny saved is a penny earned.
Teaching financial literacy to young ones is as important as teaching them to read and write. The subject is generally not taught at schools, so as adults, while some of us have the innate ability to save and manage finances, others have to fend hard for themselves.
As parents you can always empower the next generation by teaching them about saving and managing finances. It may not be the easiest thing to do but it is not hard either, and here we share some tips on saving habits that you can pass on to future spenders and savers.
In the end, we all know saving money is one of the most important aspects of building wealth and having a secure financial foundation.
Let’s Start
Buy Your Child A Money Box
Set the foundation by buying your children a pretty money box, ideally in the shape of their favourite cartoon character, this should entice them to use it. Tell them that the goal is to fill the money box to the brim with notes and coins. You can use this small exercise to teach them that saving money is for the future and that the more they save the more their money will grow. If your children are given money on different occasions, they now know where to keep it and that they can save it, rather than spend it.
Open Up A Child Saving Account
Believe it or not, curiosity to save builds up when we see a bank balance growing and we gain a sense of ownership for that. If you save money for your child, it may not help them learn the habit of saving. Once their money box is full, the next step should be to take them to the bank and open a saving account in their name. In Dubai, the banks have a number of saving options to choose from. Tell them how much money is going into their account and introduce them to the idea of earning interest and how their money will grow over time if they don’t touch it.
Saving Jars To Buy Gifts
Teach your children to that special treat they are after. Buy them a money jar and put on a sticker that reads “I am saving for XYZ”. Now help them earn money through different forms, for example, give them money for good behaviour, for helping you around house and doing some chores, for good school grades, or any other occasion that deserves a reward. They can save all their cash for one purchase, or they can contribute to different “jars” for various saving goals. This exercise will help them work out their financial strategy towards their goals in the long run.
Practice Comparison Shopping
Give your child a budget and ask them to make a purchase online. Here’s the time when you can teach them how to research and find a better deal than just instantly making a purchase by seeing the item online first. Teaching them how to read labels and comparing features on different online sites will make them savvy and wise spenders.
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.
Talk About Money As An Interesting Subject
Money as a subject does not have to be scary to talk about. As we talk about culture and values to our children, talking about money matters should also be one of them. 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 which they can easily avoid. Use this moment to discuss the difference between needs and wants, obviously leaving some ground to splurge occasionally, we want them to be wise spenders not misers.
Here’s How Parents In Dubai Instil The Habit of Saving In Their Children
Karmanpreet Kaur, 32, Homemaker says “My son, Viraaj Singh has a money bank where we put money that he earns by helping us at home, or as a reward for good behaviour. 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 buy an airplane model with his savings.
Teaching kids how to save money may seem like a tough task. But using these tips, you can make your child’s understanding of money fun and accessible. It’s investing your time in enhancing your children’s knowledge in finance matter which is sure to get you the best returns."
Masooma, 40, Homemaker says, “I have fixed a pocket money for my children, they are supposed to save and buy whatever they want to from that money. Be it toys, books or even lunch from school when they don’t want me to pack a lunch box for them. Now that they have to spend their own money on these things, they have more value for money, and they naturally save and spend wisely.”
Vartika Goel, 38, Revenue Head at OYO Middle East says, “My son loves books, so rather than buying one every month, I gave him fixed money 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."
Chetna Kiran, 36, HR Professional says, “I always make my daughter earn the money she wants to spend on something she wants. On her 8th birthday, I started to give her Dhs 2 every day, so she has Dhs 60 to spend on something every month. I give her an option to spend that money or keep it in the bank (mummy) which will give her extra Dhs 50 every four months. I love the way she calculates the difference of the amount she can earn extra by not impulsively buying stuff."