5 Ways To Teach Your Child Lesson Of Savings

The irony is that the concept of budgeting is not taught in school. A person understands its significance only after turning an adult. Actually budgeting lays the foundation of money concepts in kids, as savings and expenditure are the core aspects of one’s financial life. We have explained why it is important to make your child understand financial concepts from a young age.

* Start with an allowance

One of the most important aspects to consider is deciding on the amount of allowance. An innovative way to do the same would be to attach the allowance as payment for small tasks, for instance, you pay them a fixed amount if they run an errand for you.

* Lessons in budgeting

Once your child starts receiving an allowance, it is the ideal time to teach him lessons on budgeting. One of the most preferred and ideal ways to do so is to use money jars. Give your child three money jars, each labelled as savings, expenses and charity. Every time your child receives money, ask him to divide the same across all the three jars.

* Finance in a fun way

Try and use methods which are easy for kids to learn and understand. The easiest and best way is to make them play board games such as Monopoly and Business Move, etc. which help to learn the concepts of money.

* A joint exercise

It would be wise to include your children in monthly household budgeting. This will help them get a first-hand experience of how things are managed.

* Investment time

It’s important to teach children how they can make money work for them rather than the other way round. An ideal way to do so would be to introduce to them the concept of keeping surplus savings in a bank account and teach them how to operate a bank account, which includes activities like filling pay-in slips, withdrawal slips, opening a savings account, filling a cheque etc.