Catch them young: Four money saving habits you should teach your kids

Most parents wait until their children enter their teens to teach them importance of managing money. However, it is increasingly becoming significant for parents and teachers to talk about saving habits with kids at an early age. This will give little ones a fair understanding of how little savings can reap benefits when they become adults.

During a classroom lesson at a school in Bangalore, Pooja, a young student raised her hand in doubt to understand the meaning of ‘carried balance’.  

The teacher explained it by taking a real life example like,  if she had her credit card swiped for a purchase of Rs 1000 and paid Rs 800 back to the credit card company the same month, she would be receiving a bill from the company for paying the balance amount of Rs.200 before a stipulated date.  

The teacher was shocked to hear Pooja’s response when she said, “What bill?” and exactly in the same discerning tone that you are thinking about.  

Pooja did not know about the basic working of credit cards. She was unaware of the fact that credit card holders actually pay back the amount in cash, which they had spent while shopping.

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While her parents might be dealing with such monthly bills, she wasn’t taught about how a basic transaction works with credit cards. This case clearly points out to larger problems relating lack of knowledge on financial transactions amongst growing up kids.  

Given how vital it is to have proper financial skills in life, it is quite a surprise that schools don’t focus much on educating youngsters on the importance of money.   

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Saving chart 

Parents are known to be the first teachers and home is always regarded as the first school of a child. Being parents, it becomes their responsibility to pay proper attention towards how they portray themselves in front of theirchildren. For cultivating the habit of saving money in kids, parents can prepare a chart that entails how much to save per week or per month.

To begin with, children should be asked to save 10 percent of their pocket money.

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Trip to the bank

Young children love behaving like their elders. It is just the sense of responsibility that excites them. And what could be a more productive way of nurturing this trait by taking them to the bank and having a savings account opened on their name. The feeling of having an individual bank account is sufficient to encourage them to save more. 

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Control impulsive shopping

The mere presence of money in the wallet prompts children to spend more.They need to be groomed for controlling impulsive shopping or spending more on friends.  

This habit can be cultivated over a period of time by putting a momentary pause on their favourite purchase.  

This would help in giving them a moment to think whether they really need that item or are just letting their inner craving supersede. This will in turn help them to say ‘no’ to wasteful expenditure.

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Maintaining a domestic passbook

Letting children calculate their savings by maintaining a personal passbook is another motivational way to inculcate saving habit in them. This will help them see how their money grows over a period and simultaneously will also instill a sense of responsibility in them.

Teenagers will not only be able to do the simple math of saving money, but will also feel like investing it in something productive to make the saving shrub turn into a big money tree. 

These lessons may seem difficult to inculcate, but they definitely hold the capability of paying off later.

Also, it will help children avert debt on their shoulders when they grow up.

Early lessons can help  children in taking responsible financial decisions.