Money Matters: Kid's Edition

Teaching Your Children the Value of Saving: A Guide for Mothers

It is especially important to teach our children the value of money in the society of our day when people tend to spend money and buy things right away rather than save it. As moms, we are in a position to ensure that our children gain financial knowledge so that they can make the right financial decisions in the future. The following are some fun, exciting, and quite useful ways to teach your children about money management.

Start with the Basics

First, there is the need to teach your children about money as a first step in the process of teaching them about saving. Explain to them the various forms of money and how it is obtained. Use real-life examples, for instance, when buying food, or when planning for a family trip, to explain how money is used in the exchange of goods and services. This is a important foundation that will help them to understand the value of money.

Make Saving Fun

Children will more likely save when it is fun! One way is to have a ‘Savings Jar’ system. You should use transparent containers for your children to be able to see their money grow. You can even make it more fun by decorating them together, making the process of saving a fun one. You should also encourage them to put their money in the savings jar every time they receive money from their allowances, chores, or gifts.

Set Goals Together
We have to help our children to set some realistic savings targets. It could be a new toy, a new bike, or even a visit to an amusement park; having something to save for will definitely make them save money. Discuss how many weeks, or months it may take to save up for their goal based on their current savings rate. This will help them learn not only about saving but also about financial planning and the concept of deferred gratification.

Teach the 50/30/20 Rule
When your children get a little older, you will be able to introduce them to some basic budgeting rules like the 50/30/20 rule. This rule tells them that they should use 50% of their money for living expenses (school supplies), 30% for leisure (toy or games) and 20% for saving. This simple framework can help them to understand how to manage their income and expenses and can be the foundation of good financial choices in the future.

Real-Life Practice
Provide your children with opportunities to apply saving in real life situations. Do not let them buy things that they want; instead, tell them to save for it. If they have a birthday coming up, tell them to save some of their gift money instead of spending it all at once. Play store at home. Set up a store at home and let the "buy items" using play money. This teaches them how spending and saving  work in a safe and fun environment. You can also involve your children in family financing processes and let them know how you manage your family’s funds and save for family goals.

Celebrate Milestones
Once your children achieve their savings goals, you should celebrate their success. It could be a small treat, a special day out, or even just some words of appreciation. This rewards the saving behaviour and shows them that hard work and patience are rewarded.

Play Money-Related Board Games

Games like Monopoly, The Game of Life, or Payday help children understand money management, budgeting, and saving in a playful manner.

Teach With Storybooks

There are plenty of children's books that teach financial literacy in a fun way. Some great options include Bunny Money by Rosemary Wells or The Berenstain Bears’ Trouble with Money by Stan and Jan Berenstain.

The Power of Giving
Teach your children that saving is more than just working towards personal financial gain but also involves giving back. Teach them to contribute a part of their savings to a cause that they are interested in. This does not only help in the development of empathy but also shows that money can be used for good in the society.

Be a Role Model
Children learn a lot by watching their parents. Be a good example to your children in the management of money. Describe your financial goals to them and explain how you save your money. Explain to them how you prioritize your saving for future needs and experiences and engage them in the selection of financial choices.

Final Thoughts 
Teaching your children about money management using practical steps is one of the greatest things that you can do for them to ensure that they are well provided for in the future. This way, you can make it fun, set some goals, and be an example so that they can learn how to make financial decisions on their own. As they save, they will not only create a stable financial future for themselves but also learn the value of responsibility and independence. This article is not a set of instructions that can be completed in one sitting, instead it is more of a journey that should be enjoyed along the way.

Download my free printable savings tracker to use with your child.