Written by Shashwathi Sandeep and published on 17 July 2021.
There are fun ways to teach your child about saving money other than piggy banks. All you need to do is connect money management with things you do every day. Here are some interesting ideas...
'A penny saved is a penny earned' - that is what most of us learn as children. Do you remember your parents giving you pocket money and asking you to put it in a piggy bank? Well, that was our parents' way of teaching us the importance of saving money.
"When the child starts understanding that the piggy bank is to deposit what you have got, he learns the concept of saving and money management," says Chintan Vora, Vice President of Product Engineering, 5nance.com, a Personal Financial Management platform.
As parents, the earlier you start teaching your child the importance of saving money, the better, observes Javed Tapia, Founder, Slonkit, a money management app. "According to a Chinese proverb, 'Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.' This applies to savings and investments too. It is essential to teach your child to save money to help her grow into a financially prudent adult," adds Tapia.
Sitting down with your child and giving her a talk on how to save money might bore her. So, liven things up and involve your child in activities that are fun and also teach a thing or two about saving. How, you may ask! Well, here are some ideas...
This is what you might call a 'new-age piggy bank'. Usually, it is a single jar, but to make it more interesting, get about two or three jars and label them with the names of things your child might want to save for - 'Toys', 'Hobbies', 'Holidays', etc. When your child gets some money, he can divide it equally among the jars or choose one jar to put the money into. That way, he sets his priorities right and saves for what he considers the most important.
Remember Monopoly? Or Business? Or Catan? In this era of smartphones and smart devices, it is quite possible that your child will have forgotten the charm of sitting down with the entire family and playing board games. Well, now is the time to introduce such games. Firstly, these are total fun and secondly, these board games can teach your child a lot about saving - which property to buy, which property to let go...it's all part of the game!
Next time you go grocery shopping, don't think about how stressful it will be if you take your child along; it might do you both a lot of good. Give him the shopping list and also, your budget. Now, watch as he makes wise and sometimes not-so-wise choices on what to buy and what not to buy! This way, there will be a lot of bonding happening and he will know how to manage money within limits. And even, save a rupee or two.
Chores need not be boring for your child anymore; giving rewards are sometimes motivating and great incentives! For instance, your child might want to buy something but, don't give in easily to her demand. Instead, encourage her to save up for it. So, how can you help her? Tell her that every time she completes a chore, she will be rewarded with money, which can go into her savings. When she has finally saved enough, the joy of buying what she wants will be all the more. In the process, she learns about looking at the bigger picture and realises that saving money is actually good.
It's great to teach your child to save for a rainy day. But how do you go about it? Incentivise them to save for a dream purchase. So, if your child wants a smartphone or some other gadget, challenge him to save for it from his monthly allowance. If he succeeds, then do reward him with what he desires. Such challenges may be small in terms of managing money but great milestones in terms of making him financially prudent.
Now, who does not love this game? Of course, it works best with a younger child. Give her certain clues and hide coins or notes there for her. Let her keep what she finds and encourage her to add this to her savings. Also, introduce your child to methods like Abacus, which are fun and teach her how to count. After all, the younger the child, the more important it is to know how to count!
What better way to teach your child about savings than encouraging him to manage a business of his own? For tweens and teens, this might be one of the best ways to learn a few things about money. It might be as small as setting up a homemade cookie or juice stall, a handmade jewellery business or even, developing apps. Along the way, your child will learn how to earn, manage and save money.
Teaching your child the 'value' of money and encouraging savings, will make her a better 'money manager' in the future. Equally important, do make your child realise that money is just a part of life and that she needs to cherish the little joys too. After all, most of them come free!
With inputs from Chintan Vora, Vice President of Product Engineering, 5nance.com and Javed Tapia, Founder, Slonkit.