One of the most important things you can do as a parent is teaching your kids about finances. Saving money is one of the most important aspects of building wealth and having a secure financial foundation, and before you know it, they will be out on their own and forced to fend for themselves. “Fending” for themselves absolutely does include having enough money to survive from day to day, hour to hour.
There are a couple of ways you can go about telling kids what they need to know, but all of those lessons need to include ways they can go about saving money.
Start with a Piggy Bank
A piggy bank is really the ideal way to teach your kids the importance of saving, while giving them an easy and fun way to do it. A great first step on the road to teaching your little ones about saving money, sit your kids down and tell them that the goal is to fill up their piggy bank with money, until there is no room. Explain to them that the piggy bank is for saving money for the future and that this is very important. The more they save, the more their money will grow.
Open Up a Bank Account
This is really an exciting time for your children. Once the piggy bank is full, take your child to the bank to open up a savings account for them. Make them feel grown up. Have them count how much money is going to be deposited, so they can have a physical understanding of how much money they have. Show them the final number and reinforce the idea of interest.
Lead By Example
Children learn by example, so the best way to teach your child about saving money is to save money yourself and to let them in on how you do so. To make things a bit easier and more fun for your child, have your own jar of money that you put funds in regularly. When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another. What’s more, reiterate the message that every time you get paid, you save a portion of your check to help prepare for the future.
Discounts on Bigger Purchases
Finding ways to lower costs on regular monthly expenses is key. You are going to want to make sure your children know not to buy the first car insurance they come across for example. If they are old enough and have the skills to shop for things like internet service providers and cable providers they can quickly learn shopping for car insurance is similar. You can compare prices shown by Acceptanceinsurance.com and other auto insurance company websites, but also compare the policies themselves. While the stakes are a bit higher than choosing a phone or cable package, it’s basically the same thing.
Your children need to know that while shopping for this kind of thing might feel frustrating at first, they need to make sure they are doing the shopping and not choosing the first company they come across. Taking their time and look through options is the only way they are going to be able to save big money in the long run and at a good clip.
Bargain Shopping
One lesson that used to be a lot more prevalent but now needs to be taught again more often is that packaging is largely a misdirect. When you are going to the store to get your groceries, you might want to get Tide laundry detergent because that’s what you see advertised on television, but the fact of the matter is that there are plenty of other detergents that are going to do the job just as well that are going to be about half as expensive.
This is also very true when you are purchasing medicine over the counter such as cold medicines or pain relievers. Advil and Aleve will absolutely take care of your aches and pains, but ibuprofen that is generic has the same chemical ingredients and will do the exact same thing as Advil. Teach your child that when they want to save a few bucks, over the counter meds is the easiest way to do so.
You can show them how the boxes on the generic medicines will usually point to exactly what kind of name brand medicine they are competing with. As long as you aren’t playing doctor and telling the kids they don’t need this or don’t need that, this is a life lesson that should be learned. Quite often, generic medicines are quite a bit cheaper than their name brand counterparts. This is the easiest path to saving money on an everyday basis.
When you teach your children to save money on things like insurance and your utility bills, your kids will realize that they might be able to end a month with hundreds of dollars more in their pocket than what they were expecting. Teaching kids about finances isn’t easy, but it is absolutely a skill they need to be going into adulthood having so that they can function. Far too many young people aren’t learning these skills and struggling quite a bit once they get themselves into the real world.
The key is to figure out the best teaching techniques and then make sure what you are teaching your children will stick and be remembered in the long run.
