“Every penny counts” the proverb which is well-read in school has a fundamental sense in our life. The meaning of money and its saving must be taught to children at their early stage of life. As childhood is like raw clay stage to be mould in any shape you want, every step taken by parents for the enhanced fostering of the child counts. Each child has a unique understanding and takes money matter differently. Parents can tutor their child about the use of money by applying different activities like giving them a piggy bank to save, making a shopping list, letting them find out the convenient deal etc. Sometimes even parents are found to face difficulties while teaching about the money saving lessons to the child, parents themselves go through many uncertainties. They face difficulty on how to create an open environment in which family can discuss the money issues. At what age onwards the child should receive money? How do children observe parent’s attitude towards money? Etc.
Beginning the financial socialization of children parents should bring into play some guiding principles like:
- Instead of order and straight them guide and advice them.
- Encourage them on their success as well make them learn from their own mistakes.
- Involve children in family money discussions and permit them to give suggestions according to their financial activities.
- Put in plain words to children the dissimilarity between the necessity and craving and make choices consequently.
- Tell children about the emergency expenses that can turn up unexpectedly and the savings can help at such bad times.
- Involve them in family grocery shopping and involve them in household budget management.
Develop their interest towards the insurance policies and bank accounts. At a certain age like teens, children wish to make their decision on their own without parents consultation. At this stage, they may be not pleased with household incomes or the allowances he/she gets and tend to get a credit from pals to satisfy their needs or sometimes requesting to exploit parent’s credit cards. Sometimes even they may get stubborn to get what they need, etc. They may also set off to earn and save at early age. They learn money management decisions and their consequences and can see the standpoint of others for money.
Parent’s role as defined to grip teens must be friendly rather than inflexible parents. The guidelines must be set up to use credits cards and cash emphasizing savings and emergency outflow like medical emergencies. Children must be clarified on what parents spend on and what children spend on. They must be permitted to have discretionary money to learn to have a grip over additional and unnecessary expenses.
Children must be involved in household purchasing like family grocery shopping and planning and budgeting on vacations, etc. Parents need to be transparent about the vital and necessary expense of household so they must know how to run a house in the limited amount of money including savings.
Apart from home tutorial on financial savings sometimes the reality check helps to make your point more relevant to children. Every small one loves to act like the grown up. Taking this for an advantage sometimes children should be taken to banks. Every child has different maturity rate, they not only need to get the lessons on savings but also must be aware that money is something which must keep on growing. They should be told about banks and how it works to secure their savings.
Parents must try to encourage interests in teens for saving as well as how to multiply the savings. The preliminary knowledge about banks can be initiated right from the children’s personal saving accounts in banks which is called piggy bank account. This step helps children to understand how every penny saved by them can actually multiply with the developing interest in savings further. Along with passing time children should be familiar of the purpose of a piggy bank, the average amount a piggy bank holds, the different piggy bank savings plan and how it helps to increase our money etc. Gradually parents can enlighten their little buds about the insurance policies helpful for their own future.
Beyond the doubts, parents know the best for their children but sometimes they too need some expert advice to deal with complicated situations. Hence, the proper follow up of guidelines may help parents and their children to meet the common goal. Parents need to learn too that instead of uttering phrases like “money is not grown on trees,” or “I am not an ATM machine”, they must focus on teaching on the importance of money and its savings without harming the young and delicate hearts.