The secret to teaching children to spend money sparingly

1. Practice saving habits

Show your child the importance of saving money. Since they are not adults, children who have not experienced the stumbling blocks or harsh realities of life, they will not know how to save stably.

To teach kids about frugality, form the habit of buying only what they need from the money they save every month. For example, you give your child $5,000 every morning and your child wants to buy a toy that costs $250,000. Ask your child to save up enough money if he wants to own the item. This teaches children the importance and benefits of saving, and also teaches them patience. To encourage saving for their children’s short-term goals, it’s best to place a picture of the desired toy or item on each jar. It serves as a visual reminder of what your child wants.

2. Open a separate account for your child

Once your kids have saved up a sizable amount from raising piggy banks, take them to the bank and open a personal savings account. Parents should even let their children count how much money will be sent, because then they can better understand how much money they have.

However, do not overestimate the value of the money they have, parents should remember that this saving must be maintained continuously, to ensure the goal they are aiming for. That will form a great source of motivation for your children if they understand that their money will increase over time as long as it is not used.

3. Tell your child where the money comes from

Two famous Italian psychologists Anna Berti and Anna Bombi observed that children between the ages of four and five often think that everyone has money and that the bank is a place where everyone can use money. Most children only see their parents, relatives go to the bank counter or ATM to withdraw money, so it is not surprising that children have such thoughts.

Slowly explain to your child where money really comes from. Talk to your child about the job you do, how you get paid, and why the bank gives you money. Explain how the day when you are not with your child is to go to work, to make money. By confiding, your child will gradually understand that money is based on labor and effort; Therefore, do not waste or waste your hard earned money.

4. Allow your child to learn from mistakes

Teaching children the importance of saving money is a process. You have to accept the fact that it’s easy to make mistakes. For example, your child may spend too much money on an unnecessary item. While it can be easy to steer your child away from this mistake, sometimes it’s better to sit back and let it happen. It will teach your kids that they should care about their money rather than spending it on things they don’t need.

This can be difficult for us as parents. After all, money is valuable, and you don’t want to see your child abuse it. However, these mistakes will lead to valuable life lessons. You will find that your child won’t be tempted to do this anymore. It encourages them to think more about their spending habits. If your child makes too many mistakes, it’s time to step in and fix them.

5. Teach your kids how to budget

In addition to setting savings goals, it’s also important for your child to understand how they can achieve them. Therefore, it would be helpful if you could teach them how to budget. There are tons of budgeting apps that both you and your kids can explore and use for free. Show your child how you divide your monthly budget between essentials.

Allowing your kids to use budgeting apps also teaches them to track their spending. Your kids will quickly understand that they need financial planning to successfully maintain a balanced budget. Do some research on the budgeting apps currently available to you. Whether you have a tablet, smartphone or Android, there are many things your kids can use to help them become better financial planners in the future.

According to Vu Tuyen

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