4 Ways Parents Can Help Their Kids Learn About Saving Money
By Valeria Cori-Manocchio
In a digital age where credit cards are more common than cash, it’s never been more vital for kids to understand basic financial skills, like saving and avoiding credit card debt. Since many kids learn these habits from their parents, it’s even more important for moms and dads to make sure kids are well-informed when it comes saving and spending money.
Here are four ways parents can show their kids how to save.
A trip to the grocery store with your kids is an excellent way to show them exactly what money can buy. Brian Smith, vice president of the Canadian Foundation for Economic Education (FCEE), explains showing kids the cost of food and other necessities helps them visualize what money gets them and how it’s used.
The age-old piggy bank is still a good way to teach children about saving money says Nancy Battet, community liaison with Lester B. Pearson’s Partnership Program. Matching your child’s piggy bank contributions is a great way to encourage them to stick with this timeless saving method. Each time children put in a dollar or $10, chip in a portion of that amount. This way children and parents actively contribute to a growing fund.
“It’s important for kids to make an informed choice,” says Smith. He emphasizes that parents discuss the difference between needs and wants with their kids. Rather than buying something at full price, Smith suggests parents and kids should search for more affordable options or wait before purchasing to deter kids from wanting the first or newest toys and gadgets.
It’s never too early to learn how to set a budget. It’s a great way for kids to plan ahead and understand the cost of special occasions, according to Smith and Battet. Theysuggest parents and kids plan a budget together for significant events like graduation or birthdays. Not only will kids realize the general cost of such occasions, they will learn to prioritize wants and needs to meet the fixed budget.