Are you currently struggling to teach your young kids the value of saving money? As a parent, you try to do everything possible to make your kids happy, but sometimes money can’t buy that. Instead, you should teach your kids about saving money and start them off on the right foot with good habits so they can save up for their own purchases.
The earlier your kids start saving, the more they’ll learn about it by the time it becomes necessary for them to have their own cash reserves. Teaching kids about saving money is vital to their development as a functional member of society as well – we don’t want our kids growing up to be constant borrowers who can’t hold onto money for longer than a weekend.
One way you can help your young ones to learn the importance of saving is by opening a kids savings account with BOQ.
What are some good money-saving habits for Australian kids?
Modern transactions are now mostly ‘invisible’ according to MoneySmart – physical money is hardly used in Australia. Rather, credit or debit cards and even phone payments are the norm, which makes it harder for kids to understand that money is tangible and can just as easily be lost as gained.
One of the most important financial skills you can ever learn is how to budget. It might seem silly to teach kids about budgeting, but it’s an easy way for them to start saving. While their expenses are nil, they might have small amounts of pocket money each week or month that can all be deposited into a savings account or put towards a purchase.
For example, if your kids help you dry the dishes and do the vacuuming during the week, they might get $5 of pocket money for the weekend. If they want to buy a $10 toy, they’ll need to save for two weeks to get it themselves. A new toy might only come out every four weeks though, so they only need to put $2.50 per week toward it, meaning $2.50 can go into their BOQ kids savings account. Over a two-year period, that money will start to really add up. If they do more around the house as they get older, they might get more pocket money, and their savings will increase at a faster rate.
Of course, they aren’t going to figure out that they need to wait to buy the $10 toy on their own (depending on how old they are and how much they listen in maths class) so you need to teach them. Make them understand that if they want a new toy each month, they need to save up for it. They’ll have more than enough each month to buy it, but only if they don’t spend all their money at once. If you make sure to give them cash for pocket money, the concept of money will be more tangible too.
Learning with your kids
Draw up your own budget for the week or the month, and highlight your expenses on kids. Take that amount, and sit down with your family to draw up a separate budget for things you can all do or buy together with that part of your budget. It’s a soft introduction to budgeting, but will be far more interesting for them than learning about paying council rates. Once they get the hang of it, let them draw up their own kids budget with activities and purchases over a month so they take control of an aspect of the finances and really learn what it means to set money aside for things.Giving pocket money isn’t appropriate for every family, so if that method isn’t right for you, don’t fret. There are still ways you can encourage kids to save ‘pocket money’ with you.
Teaching your kids about saving money is a huge step, but it means they’ll have the tools to be financially stable in the future. For more information, or to open a kids savings account, get in touch with BOQ today.