The top 5 reasons to start teaching your kids how to save! 

Did you know that November is financial literacy month in Canada? Even if you’re not from Canada it’s a great time to take a moment to reflect on what you know.  This year the campaign theme is Make change that counts! There are four main topics that are discussed but there is one topic that I wanted to point out that is SO important to start talking to your kids about. The topic is Managing Savings and here are the top 5 reasons to start teaching your kids how to save:

1 – Your kids will learn money-saving habits that they will carry with them as adults

The ONE thing that I hear parents say all the time is “I wish I had learned about healthy money habits at a younger age…” This is the ONE regret that I hear most often when I bring up the topic of teaching kids about money.

Imagine how different your world would be if you had started saving at 6 years old, at 14 years old, or even at 18 years old?

Don’t let your kids go through these stages of life without learning the fundamental skill that will help them be independent and thrive!

2 – Your kids will learn delayed gratification 

Remember the marshmallow test? Where you give them a marshmallow and tell them that you’re going to leave the room for 10 minutes and when you return if the marshmallow is still there then you will give them two. 

It doesn’t matter how much they actually save; what matters is the purposeful act of saving. Every time they receive any money, whether they earn it from a job at home or are gifted some cash, encourage them to think about saving half of it for something in the future. The key here is to not force the issue but make it fun. The conversation could start something like this: “I know you’ve had your eye on that new Lego set, how about, I will match any amount that you put into your savings, that way you will save for it faster. Then as soon as you save enough money for it, I will take you to go buy it.” 

Try to encourage your kid to pick something that is achievable but not too easily achievable. 

3 – Your kids will feel joy and accomplishment when they reach their goal

Now imagine that day is here! They have saved the entire amount with your generous matching. Of course, it doesn’t have to be this amount but whatever you can afford to help out with. On the other hand, even if you could afford to help them more, don’t do it! Let them learn that it takes time, days, weeks maybe even months! 

Then imagine taking them to the store on the day of and picking out the exact thing that they wanted and then letting them hand the money over to the cashier. Imagine how proud they will be, that is a moment that they will carry with them and encourage them to save for the next goal. 

Remember these goals don’t have to just be consumable things, they could also be for experiences, tickets to the aquarium, or even a movie. 

4 – Your kids will learn independence

This subsequently leads to the next point which is that they will start to feel SO independent. They will think wow, this is something that I can earn and pay for by myself. What else could I possibly save for and purchase??

The idea isn’t for them to save only to buy things but it’s a great motivator to start here because of the rewards of getting something they are truly excited for!  As your kid gets older, you’ll want to encourage them to start saving for things that will invest in their future like their education or even starting to save for retirement!

We won’t get into the details of compound interest here but most people know that the MOST beneficial thing is TIME. Can you imagine how much their retirement fund would grow if they started investing at 14? (Please note that as minors they will have to start investing under the parent’s name but it’s a great skill to start learning about!) Or even if they only learned about it as a kid and then started to invest at 18? That amount of extra time can make a world of difference by the time they retire.  

 

5 – Your kids will (hopefully) ask you to buy less things! 

Last but definitely not least – imagine a life where your kids are willing and able to save and spend their own money instead of constantly asking you for it! There can be a lot of different ways to help them achieve this, whether you help by matching their savings for big ticket items or help provide lots of little jobs that are easy and achievable to help them reach their goal!

Ultimately, the purpose is to show them how to wait, save and work for their goals. In turn, they will (hopefully) ask you to buy less things for them, instead they will think it’s fun to earn it themselves! 

Conclusion

Ok so now it’s time for a bit of tough love for you, the parent. The ultimate thing to take away here is that they will not learn any of these skills unless you as the parent are willing to teach them. This will take time, patience, kindness, and discipline. But the most important thing is to start!

Even if you start small, just make sure to start now. I KNOW that you can do this! 

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