Set a good example
Children naturally learn lots of different behaviours from their parents. Money habits are formed between the ages of six and twelve based on what your kids observe from your spending. If you’re making a lot of impulse purchases, or you and your partner/family are arguing over money – your child will learn from this behaviour. Try and set a healthy example and you’ll help them get off to a great start!
Use a clear jar for savings
In the same way we create budgets and check bank accounts to see our savings grow, kids also need a visual reminder of their savings to keep them motivated. Instead of using a piggy bank or a tin, use a clear jar so that your child can see their savings grow over time. This will motivate them to keep saving, setting a great habit for the future.
Let them purchase items
Every child will ask their parent for a toy or a treat from time to time – but what they don’t realise is that each purchase costs money. Once your child has saved up some money with their jar, let them make a small purchase so they can see and experience the change in their savings. They’ll quickly learn the value of saving for bigger items in the future!
Show them how opportunity cost works
As your child gets older, they’ll become better at weighing decisions and understanding different outcomes. Help them understand the value of their current savings by comparing the cost of one item to another. For example, if your child wants to buy a bag of lollies, let them know they may not have enough money to buy a plush toy. This teachable moment will help with saving later in life.
Money as a reward for work
In the same way we work for an income, children must learn that earning money is the result of work. Give your child some chores to do around the house like taking out the trash, cleaning their room, or tidying the yard and pay them an amount when they complete these tasks as a reward.
Avoid impulse purchases
A trip to the shops or the market will likely have your child asking you to buy them something. Instead of buying it for them, tell them they’ll have to buy it with their own money. If it’s a bigger purchase (e.g. around K40), tell them to wait a day and if they still want it, you’ll return and get it then. This will help them learn to control their impulses and consider if they truly want to part with their savings.
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