Ever good parent would want to teach their children good habits and one of those is saving. I’m a father of two lovely daughters and as a business, teaching them how to save money is one of the items in my priority list. But how exactly does one teach a child how to save?
Reminiscing…
I still remember that small piggy bank that I used to have when I was a child. Ok, I can’t really remember if it was a piggy bank but one thing’s for sure – it’s a container with a slot big enough for me to insert the coins that I saved for the day. Guess what? Like many others, I never had the chance of filling my ‘piggy bank’ to its fullest. Only recently did I discover why.
The mistake…
Most parents will teach their children to just put their extra money into their piggy banks without actually teaching them to learn how to control their spending habits. Fact is that most children would be easily tempted to spend their money on something they like. After all, mom and dad will give more money tomorrow so I’ll just save tomorrow. Tomorrow comes and still no money was saved because little Johnny found something else to buy and so the cycle continues.
But it doesn’t end there… eventually, Johnny finds this something to buy that costs more than what mom and dad gives. So he checks out his piggy bank and finds for a way to get the money from inside without breaking it. In essence, Johnny learns to steal from his own savings.
Most of the time, this pattern continues until Johnny becomes a teenager and carries it onto college and on and on and on until he gets old. In the end, Johnny still tries to save each time he remembers what mom and dad told him but sad to say, he doesn’t know how.
The proper way…
I was like Johnny and honestly, until now, I find it hard to save merely because I’m just starting to control my own spending habits. This got me into thinking that if I have to teach my children the virtue of saving, then I have to find out how to do it correctly. Obviously, what I was told when I was young is not working and it’s not working for the majority of the population either.
As I thought and pondered, I realized that the problem was rooted to how I can control my self when it comes to spending. I deviced a plan and tried it on my kids. Here’s what I did…
I told my daughters that I will be giving them a certain amount each school day which they can choose to either spend in school or put in their individual coin banks. I never put any pressure on them with regards to what decision they should make. In other words, I made them decide. In fact, there are days that I encourage them to spend their money just to see how they would react. One day, I asked my younger daughter (Vhi Lopez) if she wants to buy ice cream and I was surprised with her reply. She said, “I don’t have any money with me. I already placed it in my coin bank before we left for school. When my coin bank is full, then I can buy myself all the ice cream I want.”
Vhi’s reply alone proved that my technique was working. She already understood the idea of saving and she found out a way for her to control her spending habits. There are days when Vhi would take her money with her in school and spend it. She happily tells me about it and I never got mad about it but most of the time, she would put her money in her coin bank.
The same is true for Kei (my eldest). She almost always put her money in her coin bank before she left for school. There are a few times when she took her money with her and just chose to spend it.
Adding more spice to the recipe…
To add more excitement into it, I also told them that I will give a gift to the one who fills her coin bank first. This gives them more reason to save and it works pretty much like a real bank in the sense that we earn interests from our bank savings.
Two birds in one stone…
The best part of this is that by teaching my daughers the proper way of saving by controlling their spending habits, I am also preparing them for the next lesson in my list which I plan to teach them by next year. The next lesson that they will be learning is how to invest their money into something so they can make more money from what they already have.
I do believe that children should be taught lessons like these early in their childhood because when it comes to making money – time is a very great factor.
Lastly, if you’re a concerned parent like me, then I would suggest that you teach your kid(s) the proper way of saving now. I also find the book Rich Kid, Smart Kid to be very very helpful. I think you should read it.
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