Money is a very important lesson that should be taught to all children by parents and teachers. Nowadays, the accessibility to online shopping, online money transactions, advertisements and the internet has made it extremely difficult for parents to teach their kids the importance of money at an early age. It is this saving habit which helps kids takes responsible decisions, become self-disciplined and independent to use their financial resources well. Children who are taught about financial matters from a young age are most likely to be responsible when they grow up and be well-off adults in their youth. Here is how teaching children the skill of saving money can be fun and educating at the same time, by the implementation of simple practical techniques:

Begin with Basics

Kids should first learn what is money and its importance before learning how to save money. Parents should start teaching them what money is; how it is earned by work and what can be bought by it, that is, necessary things as well as desired ones. Parents can help them learn the basics of money with:-

• Everyday situations such as paying electricity bills, grocery bills, etc.
• Shopping for clothes and toys.
• Parents should aim at keeping the concepts clear, simple and at the same level of their children’s intelligence so they don’t get confused.

Give Kids a Little Allowance

A small allowance given at the beginning of every week or month is a fool proof way to guide them in spending their money responsibly. This gives them a sense of controlling money and teaches them how to spend it wisely. The children should be guided to divide the allowance into spending, saving and charity (donating). They should learn that if they spend the entire sum today, then it is very likely that they will be left with not much in hand to buy some major thing later on.

Introduce Saving Goals

Children become more eager to save money if there is a particular thing that they really want, say, a bicycle, a toy, a video game, or any gadget or thing needed at school. Parents can help them find what they want, fix a price on it and inform them about the time they will require to buy the desired thing by saving the amount on a daily or weekly basis. It’s satisfying for them to see the amount accumulating and also teaches them patience and forethought. Seeing it all collected in a piggy bank could be fun as well, especially if it is see-through.

Teach Them the Difference between Needs and Wants

Another major point that should be made clear to children is the difference between wants and needs. Needs are food, clothes, books for school, shelter, etc., whereas wants can be designer toys, extra gadgets, and such non-essential items. This will help kids realize where money should actually be spent. Parents can even take them shopping and help them distinguish between what is needed and what is not required as a want, which will prevent them from overspending later.

Let Them Earn Money Through Work

Children will realize the worth of money when they come to know how much effort it takes to earn even a tiny sum of money. Parents should give their kids simple jobs in order to earn money, which may include:-

• Cleaning their room.
• Helping in household chores or gardening.
• Arranging their toys orok bos.

This will help children realize that money is not something to be carelessly spent. However, not every little task should be rewarded, and it is important that certain tasks are just a part of their responsibility.

Lead by Example

Children are mostly visual learners and tend to follow their parents. If parents can inculcate saving money as a habit themselves and try to be less materialistic and demonstrate these responsible spending and saving habits, the children will automatically learn them. When kids observe their parents carefully manage their money and their family budget, these concepts will surely seep into their consciousness.

Teach Smart Spending Habits

As essential as it is for kids to learn how to save money, they also need to learn how to spend wisely. Kids should learn how to compare prices, find the value for money and not indulge in impulsive buying. Children can be shown the benefit of buying things on sales, the differences between different brands before buying something, and the importance of buying quality over quantity. These strategies will help kids turn into smart buyers.

Utilize Games and Activities

Children learn best when they play games. There are many board games as well as online games that help children to understand and manage their finances properly. Some of these games may be the replicas of actual money transactions and spending in a playful manner. Activities like playing a pretend shopkeeper, paying and receiving money while setting up shop or having friendly competitions of collecting money within a stipulated period will definitely create an entertaining atmosphere for children to learn the tricks of managing money.

Inculcate the Values of Charity

Alongside teaching them about saving money, it is imperative for parents to teach kids about kindness, helping others, and being compassionate. This can be achieved by allowing them to donate a certain portion of their savings to a charity or needy person. This will make them realize that money is not only for personal use but can also be a source for helping the poor and will give them a good sense of responsibility towards society.

Be Patient and Consistent

It takes time to teach money management to kids, as it’s a gradual process and they might not be able to follow these concepts from the beginning. Therefore, it is important for parents to be very patient with their children and guide them constantly with their money matters and finances. Children will only be able to understand this complex topic gradually and persistently.

In conclusion, teaching children to save money will make them resourceful and financially literate in the long run. It will make them financially responsible, prudent, smart money managers, responsible adults, and ultimately financially successful.