This is just one of the many reasons why it’s a good idea to teach your child the importance of saving. Indeed, money management is perhaps one of the most important skills you can teach your child. And you shouldn’t start when he is a teenager. In fact, you can begin as soon as your child can count proficiently and understand the concept of money. The earlier your child develops the skills and habits of good money management, the better.
• Pocket money. Giving your child the responsibility of taking care of their own money will encourage them and teach them the value of money. You can opt to give them extra money if they do their chores on time, or if they do particularly well at school. Likewise, you can take away money if they have misbehaved or failed a test.
• Saving. For younger children, use a piggybank to teach them the concept of saving. For older kids and teens, you may prefer to open a Saving Account for them in the bank. Encourage your child to set aside a small portion of their pocket money into their savings. Watching their pot of money grow will motivate them to keep it up.
• Set a goal. Stimulate your child’s motivation by giving them a goal. Help them identify something that they really want, such as a new toy or video game (but make sure it’s doable). Visualizing it helps as well; ask your child to draw a picture of their goal and hang it somewhere visible – it will give them something to work towards.
• Track their progress. Once your child has set his goal, you can devise a savings plan for your child to see how close he is getting to his goal. If he fails to reach his goal in time, help him study the reasons why and how he might do it differently next time.
As your child gets the hang of how money and savings work, he will be able to stick to his savings plan and reach his goals. Then, you can introduce more sophisticated goals and saving methods.