Kids can save money too

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Children usually want to spend money they receive immediately. As parents, you need to teach them how to save money. Although it is not an easy task, you may have to tell them the benefits of a saving culture in exaggerated ways

Envelope or jar technique

Let your child make a daily habit of keeping money aside in a jar or an envelope from their pocket money. Target a percentage, for instance, 10 or five percent.  A child who gets N100 as pocket money can save N10 each time the money is given to him. They could have two jars, one containing savings for long term goals and another for short term goals.

Make a savings goal chart

Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. You can represent each week with a box and your child can put a sticker in that box once the money from that week’s allowance is set aside.

Offer rewards for saving

Consider rewarding your child for saving their money.  For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves.

Set a good example

One of the best things you can do is to let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is normal.  Furthermore, since most young children are copy cats, seeing you do it will provide them with money lessons that further inspire them to save.

 Match your child’s contributions

A savings match can be a great way to encourage your child to save extra money. For every kobo he sets aside, offer to match the contribution, if the child saves N1000, you can match it with another N1000.

For older kids

As your child grows older, keeping money in jars may look less inspiring and a bit too juvenile but here are a few more ideas you can adopt:

• Open a high yield savings account: When a child is old enough to understand the concept of interest, you can look for savings accounts that earn interest. Most banks promote such products, you can approach one for advice. Go with the child and let them explain the concept of compound interest and its importance to them.

• Help them to prioritise

Have an older child write out a wish list of things they want to spend money on. Then, help them to prioritise that list.  Teach them on how to think long-term as well.  Older children can save up for a nice laptop or a trip to a nearby state. Have them allocate an amount of their allowance or income to each goal. These are the beginnings of a financial plan and this type of thinking will serve your child well in the long run.

• Let them make mistakes

Sometimes, the best lesson comes from a poor decision, especially when your child is young and is not at a risk of committing a huge financial loss.

• Play games

There are a number of games available to teach financial concepts to children. Monopoly for example, can teach money management skills as well as the importance of planning ahead.

• Talk about money

While you may not want to discuss your salary in front of your children, don’t shield them from discussions about the financial plan and arrangements you are making for retirement. An example is having a conversation with your spouse while your children are in the room. This way, your children can understand that saving is a lifelong endeavour.