As parents, we want nothing but the best for our little ones, especially a bright and prosperous future. However, we are also aware that we won’t be there for them forever. So it’s important to teach them how to look after themselves and to arm them with the necessary skills they will need once they spread their wings and leave the nest.
Here’s one: teach them that money isn’t just for spending; that saving money is essential, too. Empower and encourage them to be financially literate at an early age through these tips.
1. Teach them the difference between wants and needs.
Wants are things that a person is interested in, craves for, or wants to own. But they’re not always necessary. Needs, on the other hand, are essential things a person cannot live without. Knowing the difference between these two can help them decide whether or not it’s worth spending. Teach your child these concepts and provide examples they can easily grasp: additional toys fall under “wants” while food falls under “needs.”
2. Equip them with the tools.
It doesn’t matter if it’s just ₱5 every week or a peso every day. The important thing is you instill in them the habit of saving. Buy your child their own money bank and teach them how to use it.
Another thing you can do is to open a bank account for them. Check this list of savings accounts for kids you can choose from.
3. Model the behavior.
Your child will always look up to you and observe how you do things. Do they always see you purchasing something and you end up not using it anyway? Or do you buy good secondhand items instead in an effort to save a couple of bucks? Your money habits are also a form of education for your little ones so be sure to act as a worthy role model for them.
4. Let them experience earning their own money.
Yes, you can just go the easy route and give your child some money. But letting them earn those bucks instead will teach them more about hard work and the value of every single peso. Perhaps they can start making cupcakes and you can help them sell these sweet treats in your neighborhood. Or they may have used items they can sell online. When these little ones work hard to “earn” money, they will be more encouraged to use money wisely—and opt to save them instead.
5. Use games to creatively teach them about saving money.
There are several games that teach the value of saving money. Not only are they educational, but they also make the whole concept more fun. Monopoly is one board game that educates kids to save and when to spend. You can also do pretend plays, such as managing a grocery where felt money is involved.
6. Teach them how to track their expenses.
If your child can already write, get them a small notebook where they can write all their expenses, no matter how small. By making them start a spending tracker while they’re young, they’ll be able to easily continue with this practice as they grow older. Spending trackers are great if you want to see where all your money goes and assess if you can save more by cutting down on certain expenses.
7. Establish open communication about the topic.
Just because they’re young doesn’t mean you shouldn’t discuss money matters with them. Let your child know that if they have questions about it, they can come to you for advice. This is especially useful when they start earning their own and need some guidance on how to properly budget and save.
