Make it fun
It can be hard for younger children to grasp the concept of saving so turning it into a game is a great way to introduce the concept. Small supermarket toys are a great way of doing this, they can play shopkeeper and practice exchanging money for items. You can also let them play with the different coins so they can learn how much each one is worth. Once they get the idea, they will learn that more coins mean they have more money in total and this will introduce them to the practice of saving.
Give them the opportunity to earn money
Getting your kids to earn their own money by doing chores around the house will teach them that money needs to be earned and once you spend it you’ll have to earn more. Encourage them to save up for a purchase they have had their eye on, such as a toy or a game. Saving up for a short-term goal will help them later on with long-term goals.
Get them involved
It’s important to set a good example of how to spend, manage and think about money. Openly discuss how you spend and save with your child such as budgeting for a holiday. You can work out how much you need to save if they want to do certain activities and get them to contribute some of their pocket money. You can keep a visible tally so they can see their progress.
Let them make mistakes
It can be tempting to take control of your child’s money so they don’t overspend on toys or treats, but this won’t teach them good money habits. Mistakes will happen and they may spend all their money at once. Let them learn for themselves that if they spend all their money then they can’t add anything to their holiday savings or something they have had their eye on for a while. This will teach them the consequences of poor money management. Make sure you explain this in a calm way so they don’t start feeling guilty around money and hopefully, they will get the idea and weigh up their options better next time.
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