What’s your child’s money personality? Natural saver or spender? In episode 13 of the Change in your Pocket series, we give you tips on how to teach your child to save.
– Video supplied by BrightRock
Welcome to The Change Exchange where we’re chatting about ways to raise a financially savvy child.
I know from the personal experience of having two very different children that everybody is born with a money personality. For some children, saving comes naturally but for other children, money burns a hole in their pocket and they are not happy until every last cent is spent. But with the right encouragement, you can change your child’s attitude towards money.
My first-born is a natural saver. He is quite happy to hoard all his pocket money, splashing out occasionally on books. My second-born, however, is a completely different child – money has no value for him at all unless it is turned into something tangible. I was really worried about what would happen to him once he grew up and discovered credit cards!
However, through teaching him about money and the value of goods, as well as getting him to set goals, he has saved over R1 000 in his bank account, which is not bad for a nine-year-old.
Goal-setting is without doubt one of the best ways to teach your child to save.
It’s very difficult to explain to a young child that they must “save for the future” but it’s much easier if they have a specific goal in mind. Once they’ve identified thatgoal, help them to do the research. Calculate how much it will cost, how much they must save each week, and how long it will take to reach that goal.
For teenagers, the goal of wanting to buy a car can be a fantastic motivator to save. Some parents offer to meet their children halfway by matching whatever they have saved – this can, however, be quite risky if you have a serious saver on your hands, so maybe set a limit to be safe!
Saving money in a piggybank is a very tangible way to teach children about money, but there comes a time when a bank account is more appropriate. A bank account also teaches children about banking, and it’s a great opportunity to turn it into a a family project – help your child to research the various bank accounts and to understand the most cost-efficient way to bank.
And remember: teaching children is mostly about showing them by example, so make money-management part of your family discussions.