This article is written by Evangeline Villaverde of Cardinal Buoy Financials
Our children need a lot of guidance in every aspect of their lives that’s why we as parents are encouraged to have quality time with them.
We are directed to train our children in the way we want them to become so that when he’s old he will not depart from the principles and values we taught them. One principle that we have to teach them is the value of money and the responsibility behind having it. It is important that an early age they have learned the value of saving. Teaching our children be financially independent at young age will definitely help them in the long run.
Here are some ways in which can help you start
- Be Financially Literate
To address the need of helping our children in the future, we must first assess ourselves if we have the discipline of saving money and the financial management skill to make it really realistic and successful. As Parents we are to be the best example for our children. Invest some of your time in reading books and attending Seminars that will equip us in this field. These will make our duty easier.
- Communication is the key to any successful relationship.
Based on my experience, it really surprised me that most of my students don’t have any idea how their parents earn and where they work. I saw the importance of it especially if your spouse is working abroad they have to know the reason why they are not around, how they earn and what it takes just to earn money. With that we are indirectly teaching them the value of money and our responsibility behind. In a way you give a clear direction on where the money should go. We create a value of appreciating the person earning it and everything that we have. Learning to live within our means will going to be very easy for them to understand. They will not ask for things that are not really important. Kids will love it if you include stories about your work and funny side stories just to keep them focused during the conversation.
- Review the Family’s Expenses with them
If you will do it for the first time, it’s a must to identify all your expenses in the past and identify if it is really needed or just “kapritcho”. The building block of a good budget is that we have already in mind the things that we only need especially if your finances does not permit you to splurge on other things other than your needs.
- Create a Budget Plan With Them
Based on my experience, it was really a fun activity when your children are gathered together to make a simple budget system. They also think of ways on how the family can save and I still remember that I am surprised when my children were still okay even if we have to cut down some grocery items.
- Provide Incentives
There are a lot of ways and means that you can do in order to give incentives to our children. It may be or may not be in the form of money. Whatever things that motivate them will surely be a nice idea, but be sure you will do it or give them their incentives. Actually based on my experience, they will not forget it if you miss it. The key is to let the child realize that saving is actually fun to do.
- Help them Build their own Savings and Investment
Encourage young children by giving them piggy bank. To make it fun, you could even make it a DIY project with your child. Use an old jar, glue the lid shut and paint the jar in funky colours and designs. Once the child is old enough, you could coax them to open an account in a bank and continue their saving habit.
Set goals: You could start by setting short-term goals — for instance, he/she could save for a toy or a book that they want. Implement long- term goals once the short-term ones have been achieved.
Allow them to earn their pocket money: Aside from just giving your child a fixed amount every month, start encouraging them to earn their pocket money. This could be anything from rewarding them for doing chores around the house, keeping their room clean or helping out siblings with homework. Assign various amounts of money for various tasks, depending on the difficulty of it.
Reward them for savings: Every time your child achieves his/her financial goal, consider rewarding them. This could be by buying a new item of clothing, indulging them in a sweet treat or extra time on the computer. Another great way to reward is to make a savings match. Similar to an employer-employee set up, this is a great way to motivate your child. Match the amount your child has saved with a contribution of your own.
Set an example: Make sure you set an example to your kids, especially the younger ones, by having a savings jar of your own, where you put in some money regularly. This will reinforce the belief that saving is normal. Moreover, it will provide with money lessons and inspire them to save.
- Talk about their Dreams
When I was a child, my mother usually tells me stories that are “imbento”. I still remember a time that all of her stories are “paulit –ulit lang” but I keep on asking her to tell that story over and over again. Children like hearing stories, so best way to inspire them is to share their dreams. Tell them your dreams when you were a child and let your child do the same. For all you know it’s only a story away.