After I had kids (and had learned some hard lessons from my own money mistakes), I knew I wanted them to be better savers than I had been. It took time, but after a few years, I was able to instill a saver’s mindset into all four of my kids. Here’s how I did it...
The following post is by MPFJ staff writer, Laurie Blank. Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.
When I was a kid, I never saved any money. I started working regularly at age 15, but I spent every dime I made – and nearly as soon as I got it.
After I had kids (and had learned some hard lessons from my own money mistakes), I knew I wanted them to be better savers than I had been.
It took time, but after a few years, I was able to instill a saver’s mindset into all four of my kids. Here’s how I did it.
Tips to Help Your Kids Learn to Be Savers
For some people, saving money comes easy. For most, it’s easier to spend money than to save it. After all, we live in an instant gratification world.
We live in a world where we’re constantly shown “new and shiny” things on TV and on our smart phones and other devices. We’re told through clever marketing that these things will make our lives more enjoyable.
Whether it’s that combo meal at your favorite drive through restaurant or that new pair of shoes, you need it. Or at least, that’s the message you’re sold via clever marketing firms.
This “have it now” world doesn’t make saving money easy. However, there are things you can do to help your kids have a longer-term vision for their money. Here are some ideas.
1. Explain Why Saving is Important
Kids follow directions better when they know the “why” behind an instruction. If you simply tell your kids they need to save, they may not take the instruction to heart.
However, if you tell them why saving is important you’ve got a much better chance of your child saving money.
I primarily taught my kids the “why” part of saving through my personal budget situation. I showed them why we had gotten into tens of thousands in consumer debt.
I’d share about emergencies that had come up that we hadn’t had money in savings to pay for. And I’d show them how much interest we were paying to banks each month due to those mistakes.
Every chance I got, I would share examples of how saving money could have averted a financial or other problem. These stories gave the kids a chance to think long-term before they spent their money.
The next tip I implemented to help my children save isn’t a popular one, but it works.
2. Stop Buying Your Kids Stuff
There’s a rule in our house: I rarely buy the kids anything they don’t need unless it’s for a birthday or Christmas gift. This includes clothing purchases.
If the kids want something extra such as a game, an article of clothing or even a trip to the movies, they’ve got to pay for it themselves.
This rule applies to anything outside of our designated family budget. For instance, the budget might account for one trip to the movie theater per month. Any other movies they see has to be paid for with their own money.
Admittedly, this is uncommon in today’s world. Many parents are very liberal when it comes to spending on their kids. The problem is that money doesn’t grow on trees – or in parents’ pockets.
If you want to avoid giving your kid the “shock” factor when they reach adulthood – or supporting them for the rest of your life – they need to know one very important truth.
3. Teach Them That Money is Earned, Not Given
What is that truth? Here it is.
Stuff costs money, and work equals money
Because I’ve ingrained this truth into my kids, they rarely ask me for cash when they want something. Instead, they’ll ask me how they can earn money for the item they want.
Bonus: because they know they’ll always want stuff, they’ve learned to save ahead of time for it. In fact, when they get money from a job or for a gift, they almost automatically divvy it up.
They’ll put some money in savings and some in a spending fund. That way, when something comes up that they want, they’ve got cash available.
Limiting what you’re willing to buy your kids will help them to think long-term about their money. And it will help give them real-life experiences - albeit sometimes painful ones – that encourage them to save.
Tough Lessons
There have been times when my kids have wanted stuff that they couldn’t have because they didn’t have the money. It is tough for me as a parent to see them disappointed. But I just keep in mind that I’m encouraging them to save more and spend less. And that helps soften the blow.
4. Make Saving a Rule
Some parents find teaching kids to save is easier if they make saving a rule. For instance, you could have a rule that every time your kid gets money they have to put half into savings.
This rule can apply to gift monies, earned monies or anything else. Establishing a habit of saving will help make saving automatic for your kids. They’ll soon potentially learn to save mindlessly, just as they play video games mindlessly.
Conclusions
At the end of the day, we can teach our kids as much as we want. However, the choices they make as adults are up to them.
Your job is to train them the best you can to save and manage their money properly. Hopefully, the tips above will help you do that.
