Saving money has numerous benefits regardless of age. So it’s great for kids to save money, but what do they save money for after all?
Telling your kids why it’s important to save money is an essential part of their lessons on how to manage their lives as an adult. Most of us probably remember saving allowances for little things like buying our favorite toy, yet millennials don’t save money in traditional ways.
Although savings can be tricky for kids today (just as much as adults), you must let them know the perks of saving money in the long run and how they can spend it on better things later.
Since we have probably heard it from our parents before about why we should save money, here’s a breakdown of some of the major reasons you can tell your kids, so they will listen!
1. Better things to spend on
Although some savings are long-term for emergency backup, saving can also connect to positive goals. For instance, perhaps your kids always wanted to take an art class or visit another state or country, or maybe they want to buy a new PlayStation.
By saving, your kids are learning how to see the world and their needs for what they could be instead of what they are. The effort they make to save enough money and meet their own small goals will help them understand the real world better and inspire them to do more. That kind of thinking is a big part of keeping your sense of hope and inspiration intact.
2. Learning money management early
If your kids are more independent and have more options, they will probably feel better about themselves and how they spend their savings. Setting and meeting financial goals can make kids confident and accustomed to managing their own money.
For adults, saving money can be much more difficult due to their habits and responsibilities. However, learning the art of saving money early on in life will assist kids in making it a part of their practical life and continue effectively managing their financial goals.
3. Financial freedom
Growing kids in their teens take on every opportunity for freedom. They wish to learn things from experience and know more about the world with a fresh perspective. In this sense, saving money will give them a sense of financial freedom as well as responsibility.
Let’s go back to buying that new PlayStation. You might feel compelled to give them a present, but giving them a monthly allowance and letting them save money for that game will make the buying experience special for your kids. The experience itself is more valuable than any present.
4. Savings for the future
For a kid, the amount of money they earn from doing chores, pocket money, or early work experience like babysitting probably won’t pay for everything they want to buy. This is when they should learn to save up some cash until there’s enough to make a purchase.
As children grow up, they will realize how much they can benefit from the money they saved in the past. For teenagers, saving money early will help them fulfill their dreams sooner. Like buying their favorite car or even their own house!
5. Avoiding financial troubles as a young adult
Suddenly, finding yourself all grown up and amidst a financial crisis in college is stressful but common for most of us. If your kids save money, they will always have enough to back them up during emergencies.
Children who learn to save money during their early teens are more likely to maintain a stable financial situation than those who don’t. The money they save helps them overcome the troubles of becoming high-functioning members of society in their 20s and feel less overwhelmed making that transition.
4 ways to help your kids save money
Explaining all the different ways your kids can save money might not work if you don’t give them the encouragement and guidance they need. These tips will help you ensure that your kids are successfully learning money management and saving while feeling motivated to do so.
1. Talk about wants and needs.
The first step in helping children understand the importance of savings is to teach them to differentiate between needs and wants. A child should know that the basics of life are necessities, not luxuries. Tell your child that buying something because it is fashionable or cool, i is a want, not a need.
2. Provide a method to save
When your kids have a savings goal, they’ll need a place to stash their money. For younger kids, you can start with a piggy bank, but if they’re a little older, it might be better to set up their own savings account at a bank or get them a kid-friendly debit card.
3. Set goals
To a child, saving money for no reason may seem pointless. Helping kids define a savings goal can create stronger motivation. If they know what they’re saving for, help them break these goals down into manageable milestones.
4. Show them how to track spending.
A crucial part of saving money is knowing where your money is being spent. Tracking expenses is easy with an app, but you can also teach your children to do so in the old fashion way. If your kids get an allowance, they can write down their purchases and add them at home to know how much they spent in the given month or week.
Saving is an important part of life. It enables us to purchase items we would normally not be able to afford. It also helps us avoid financial troubles and gain independence. Consequently, we often feel happier. We can accomplish much more since we have more options or earn extra money.
Ultimately, saving money is just as significant for kids as it is for adults, and kids get to spend their savings on things that make them happier.