All Woman

Teaching your child to save

PARENTING

By NADINE WILSON

Monday, June 09, 2014    

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IF you are struggling to get your children to appreciate the importance of saving their money instead of spending it all on toys, candies or whatever else catches their fancy, you are not alone. It's often hard for them to understand the concept of delayed gratification when they are growing up in an era where everything is instant.

But it is possible for you to raise money-conscious children, and it is important that you do.

"If you are a parent or have the responsibility of teaching children, then one of the most important things you can do for their development is to help them appreciate money and finances when they are young. One way to do this is to incorporate money lessons into their everyday activities," said money coach and business mentor Cherryl Hanson-Simpson.

"Money will be less of a mystery to children when they see it being smartly utilised in their real-life experiences on a regular basis," she explained.

Here are some tips for raising thrifty children:

1. Teach them the difference between wants and needs. Children live what they learn, and so one of the best ways to teach your children the difference between wants and needs is to ensure that you in your role as a parent fulfil their needs before you get them the things they want. This means, for example, that you should strive to pay their tuition before you purchase a name brand shirt for them to go to a birthday party. Needs are important while wants are superfluous.

2. Let them face reality. If you have a child who tends to point to what their friends have in their quest to have you approve of their frivolous spending, it might be good to get them to be more exposed to those who have even less than they do. Get your children to understand that they are very privileged, despite not having everything they want. Get them out of their egocentric world and more involved in volunteering. If you are a member of a social club, take them with you when you go to feed those who are needy.

3. Be a model spender. Let your children help you budget each month as you put the grocery list together. Avoid unnecessary purchases and be sure to prioritise in your own spending. Let your child see you having to delay buying a dress you really love in order to put food on the table. You can also have fun shopping for coupons and going to yard sales.

4. Set a goal for them. Your child might find a Barbie doll or a toy truck less appealing when stacked against the possibility of going to Disney World or spending their summer at a vacation resort. So at the start of each year, you can encourage them to start saving towards an exciting holiday vacation and point them to this goal when they start stocking up on candies. While their pocket money or lunch money obviously won't be able to pay for the entire trip, you can set a goal for them. If they meet this goal, then you can make up the difference so their dream trip can become a reality.

5. Compare prices. Make a game of identifying the costs of the various items on the supermarket shelves and choose those that are more cost-effective based on your family's personal taste. The money saved through shopping smart could be used to take them to a movie or pay for a trip to the zoo. It's important that you teach them that they should not be too quick to purchase the first thing they see, but instead, analyse their purchases.

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