Encouraging good saving habits in children
Encouraging children to save money is easier said than done. The scenarios below may be familiar to many parents:
- Why do I need to save? Whenever I need something my parents will just buy it for me.
- My parents say that the saved money will be used for my university education, but I have no idea how much I have saved and how much more I would be needing.
- It's no big deal if I have used up all my pocket money. I can ask my parents for more, or get an advance from them. I can even borrow from my friends.
Children do not like to save because they do not understand the significance of saving. It could also be because the saving goals that their parents have set for them are not their own, or that the goals are just too far away. Parents should not be discouraged. Below are 4 tips to help guide and encourage good saving habits.
- Ask children to list out the things that they want to buy, and work with them to set up some saving goals. Each goal must have a specific amount and expected realization date. For example, to save up for a book which costs $50 by the end of next month.
- Help your children to set and achieve their short term, medium term and long term saving goals. Start with short term saving goals at smaller amounts. When they reach their goals successfully, they will have a sense of achievement and be motivated to save more.
- Encourage children to learn about the different ways to save. For example using a piggy bank, opening a bank savings account, etc. Work out a plan with your children to save regularly and take note of the amount as it accumulates.
- When children demonstrate good saving behaviours and habits, parents can reward them with their favourite activities or special treats such as story time, outdoor activities, etc.