Saving For Children: Get Them Started
What do you do when your child is constantly harassing you to buy stuff for them
?A wise man named Winston Churchill once said: "Saving is a very fine thing. Especially when your parents have done it for you."
Look at those people out there who always seem to achieve their goals, they typically would have excellent savings habits - habits which they learnt when they were young. So it is extremely important that you teach your kids good saving habits early to set them up for a successful future.
Savings For Child: Where Do I Start?
Saving for children, where shall we start? When you were a kid do you remember dreaming about buying your first car? How about as a teenager dreaming what it would be like to have your own apartment, parties every night, you could do whatever you like - that's a dream worth dreaming!
The place to start teaching saving for children is to start with their strong desires - the stronger the desire the more motivated they will be to save for it. Children save money best when they have a clear goal focused in their minds, so don't be afraid to let your child dream big - as long as they know it's up to them to make their dream come true.
Make sure you convey to them absolute satisfaction of knowing that you have saved for something all by yourself, the feeling of independence is a feeling that cannot be replaced - its as important as the goal itself. Personally I will always remember when I bought my first car. I saved like a dog for many many months, when I finally bought it I had that feeling that I actually own something, not my parent's but me - that was a feeling that I will never forget.
Saving For Child: Defining Goals
Get your child to sit down and think about their wish list, what is it they really want? Typically boys will be wanting to save up for a car, girls tend to want more longer term goals like saving for college or an apartment. The key is to get it all written down, your child will become a more determined saver by writing down their goals on paper.
I would recommend starting with baby steps, get them to focus on the short term goals first so they get into the habit. Perhaps its a must-see concert which is on in a few months, or perhaps the latest release of Star-Craft just came out.
Savings For Child: Making The Dream Come True
Now that your child has written down clearly what their goal is, you're half-way there - now its time to plan. How are they going to save enough money to get it? There are different strategies depending on the goal.
- Work backwards - Let's say Lady Gaga is having a concert in 2 months time. You child knows she can divide up the number of weeks to work out that she'll need to save $50 each week to be able to afford the concert.
- Save as much as possible - Let's say your son really want to buy his first car, and he wants it desperately. There will be 2 deciding factors: income, and expenditure. Try to get some extra income and spend as little as possible - he will really accelerate how quickly he can buy that car.
- Use a regular saving plan - Say your daughter wants to buy her own place, whenever she gets paid by regularly keeping half her pocket money away she will be able to determine that she could buy her own place in 2 years.
Summary
Children save money best when they have a clear goal in mind, as a parent its your role to help them understand the connection between saving and achieving their goals. If you can do this, your child will be well on their way to independence.
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