Saving is a part of everyday life, and it becomes more important the older you get. When children start growing up, it’s important that they understand not only how to spend smart, but also how to save smart.
It can be a tough concept to grasp, as they probably aren’t aware of the actual costs of things and the long-term benefits of saving.
Here, we talk through the most common reasons that kids don’t want to save money and offer tips on how to work on them.
- Impatience: “It’s too hard to save” and “it takes too long”
The short-term annoyance at not being able to spend your money can be hard to overcome when you don’t immediately see the benefit of having savings.
What to do?
Make a savings plan together and show them how much they’ll be able to save if they stick to their plan.
Put their savings into real terms – for example, in one month, they could afford a new pair of shoes, in a year, they could afford a new phone.
Encourage them to make it a ritual – on a certain day of the week at a specific time, they’ll put money into a savings account or piggy bank.
- Lack of motivation: “Why do I need it? I already have everything I want”
When kids are used to getting all the things they want and need, it can be difficult for them to imagine why saving is important.
What to do?
Stop paying for everything and, if you don’t already do so, give your child some money (you can use a SideKick card or pocket money). Explain to them what they’re responsible for paying for – such as their phone bill or school lunches.
Make a wish with your child and offer to save money alongside them for something they want. A good way is to match the amount they’re saving or to pay some interest on the money left aside. This will help them not only to think about purchases, but also learn how to manage their budget.
- Self-doubt: “I won’t ever be able to save” or “what if I spend all my money?”
Some children might be worried about ‘failing’ at reaching their savings goals, which makes them avoid thinking about money altogether.
What to do?
Create a reliable money routine: give your child money at regular intervals – it should be the same amount at the same time each week. This will help them to build some trust surrounding money.
Start with small steps: help them plan the budget for the day, then for the week, and beyond.
Empower them by giving them the opportunity to buy some groceries or school supplies on their own. This will help them to gain confidence in their decisions, as well as spend critically by comparing prices, quality, and necessity.
- Ignorant about cost: “Why do we need to save?” or “what does saving have to do with me?”
Children don’t always understand the bigger picture when it comes to how money flows in and out of the household.
What to do?
Use your own money habits as an example and show your child how the weekly or monthly spending works in your household. Explain how much money comes in and what you do with it.
Explain how spending and savings are part of the family budget, and that parents also save and don’t buy everything they want. Give them an example of something big that you’ve saved up for as a family, such as a vacation or a new car.
Find a common goal that you can save for together, like a day out the mall or a meal at a restaurant. Work together to create a savings plan and hold each other accountable.
Encourage your child to participate in the family budget planning and show them how much you’re setting aside for the things that involve them, such as school fees or new clothes.
Let them help with the day-to-day spending, such as groceries – encourage your child to make a shopping list that fits into the budget, and task them with the responsibility of making sure everyone sticks to it.