First Metro Asset Management Inc

How to Teach Children to Save

Early on in life, most children usually view money in very simple terms.  To them, it’s basically what people pay to buy stuff.  It hardly registers in their minds that money is a limited commodity; they just tend to think that mommy and daddy have an endless supply of it.  Eventually, they will get the chance to find out what it is like to earn money when they start to receive their allowances from their parents.  As they experience plunking their earnings into their piggy banks or opening their first bank account, they will need guidance in understanding the importance of saving money.

You can teach your children to save money by setting goals to motivate them.  If they have something that they want to buy, a certain toy perhaps, it will be easy for them to learn that it is wise to save their money so that they can accumulate enough to purchase their heart’s desire.  Your kids may have an entire wish list of things that they want.  This can be a good thing, as it would encourage them to constantly save in order to get what they wish to have.  You may even motivate them further by putting up pictures of the things they want, in order to remind them of the goal that they are earning for.

In keeping track of your children’s savings, you can even apply a little creativity and make it more fun for them by turning it into something of a game.  You can post up a black & white drawing to act as a visual representation of their earnings.  With each amount of money that they earn, they would gradually color a part of the picture.  By the time that the picture has been completely colored, your kids would have then earned the target amount they had intended to save.  As a further incentive, you can also give your child an additional reward for having learned to save, maybe a toy, a treat, or taking him out on a special trip.

One particularly good way to teach your children how to save is to teach them by example.  Show them that you yourself understand the value of saving money.  Take them with you when you go to the bank to make a deposit.  Explain to them why it is important to be thrifty with your money.  Guide them in spending their money wisely, to not just spend it all in one place, as that old reminder goes.  Teach them to prioritize spending on the things they need over the things that they want.  In time, as your children grow older, they may learn to save up for what’s really important rather than just for their personal whims.  One is never too young to learn how to save, and when you teach your children to be wise with their savings at an early age, you can count on them to be responsible with their finances by the time they grow up.

Image Credit: http://www.momtrends.com/

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First Metro Asset Management Inc