Looking up tips to teach your kids good money habits may not sound like a fun way to spend an hour or two. But teaching our children about the benefits of saving is an invaluable early life lesson; up there with ‘The Importance of Good Manners’, ‘Why You Shouldn’t Talk To Strangers’ and ‘How Eating All Your Greens Will Make You Big and Strong’.
Explaining how saving works to children during their formative years allows them to develop a greater appreciation of money and may help them avoid financial issues in future. And yes, it can actually be fun.
Top tips to teach your kids good money habits
- Let your child watch you save. There’s no better way of teaching your little ones the value of saving than practising what you preach. Children look up to their parents, especially in those early years, so if they see you saving, then they will want to save, too. Putting money in a transparent savings jar or a piggy bank provides a motivating visual aid, while telling them how much you love saving should help stimulate similar thoughts.
- Set a saving challenge. Do you ever remember saving for a new game or toy when you were younger, and how good it felt when you reached that target? Setting your children little goals like this will give them a feeling of accomplishment, and responsibility. You can also tie it in with a lesson in budgeting. If the pair of trainers they want cost £100, help them work out how much, and for how long, they will need to save before they can afford them. If the item they’re after is particularly expensive, maybe ask them to save half the value while you contribute the remaining 50%.
- Encourage them to earn their own money. It can be tempting to buy your children everything they want, whenever they want; but this is never going to see them learn the value of money. Have them earn their pocket money by carrying out chores around the house. This will help develop an appreciation for money, and should prevent them from wanting to just spend, spend, spend, Likewise, when they come shopping with you, explain the difference between various prices and why buying one a cheaper item sometimes makes more sense.
- Teach them their money can grow. Money may not grow on trees, but it can certainly grow in a savings account. Teach your children all about the benefits of having their money in a secure account like our Young Savers account. This account has provided a healthy return year on year, for the last 2 years there has been a 1% dividend paid annually to all young savers and adult accounts.
- Allow them to learn from their mistakes. We’ve all been guilty of overspending at some point in our lives. So, if you see a youngster about to make a costly error with money there can be a real temptation to step in. However, making mistakes is often a good thing because it’s how we learn not to make them again. Just make sure you’re there to offer support and guidance afterwards.
- Have open conversations about money. Some parents may find the topic of money a difficult one to address. It doesn’t need to be. Improving financial literacy and awareness means your child will become more confident and comfortable around money. Be open and engaging on the subject, and answer any questions they have honestly and thoroughly. The earlier you start these conversations, the quicker they’ll begin to develop healthy money habits.
All these tips to teach your kids good money habits make for a fantastic place to start when introducing them to the benefits of saving. If you’re wanting to go one step further, why not open up a PCCU Young Savers account for them as well?
These can be opened by a parent, grandparent or carer, and are a superb way of taking money management lessons to the next level. The young account holder is not in control of the account until they turn 18. But by regularly making deposits, and watching their savings grow, they will be developing good habits around money, with the added bonus of having a nice little nest egg when they reach adulthood.
We’re never too old to learn something new either. Dividends, low cost loans, annual percentage rates; the world of finance can be a confusing place. Check out our money matters page or speak to a member of our team today if you have any questions relating to money, savings or loans.