Tips to Teach Your Child to Save Money
Every parent wants to secure the future of their children. Children’s first teachers are their parents.
Hence, it is their responsibility to teach important lessons related to money to the children from an early age.
This includes saving money. The ability to save money will lay an important foundation for their lives, helping them secure their future. Parents give some money to their children in the form of pocket money.
This money is frequently paid on a weekly or monthly basis.This is how to teach the children about budgeting. This will be the first step for them.
According to the latest study, the pocket money of Indian children is equal to the GDP of 52 countries on average.
How to Spend Money
Children should know how to spend money. Otherwise, they will have to face many financial difficulties in the future.
Money is essential for virtually every transaction. You need money to buy everything, like food, clothes, a house, etc. So here we will tell you how you can teach your kids to save money.
Incitement to Earn Money
First of all, the child has to start saving; then, encourage him and give him opportunities to earn money.
This includes giving money in lieu of household chores. This would be an incentive for him.
It is essential to explain to your child the difference between money earned and money given away. Pay them money for all the work they do. This may give them some new ideas.
What Would Be the Advantage?
This will give the child a way to balance his money. They will earn money at a very young age and save it.
Around Rs 22,000 crore is given to Indian children as pocket money, and not all of them spend their money. About 50 percent of children save their pocket money.
The 50/30/20 Rule is Useful
This rule means that fifty percent of the money received goes to meet “needs,” which children should be allowed to choose so that they can understand the needs.
Thirty percent of the earnings go to fulfil “wants” like phones and games.
Instead of buying kids these things, it’s important to help them save for what they most want (especially when they’re adults).
These include spending on your own for studies. In the end, the remaining 20 percent, which has to be saved in any case,
It is Important to Learn the Importance of Money
It is important for children to learn the importance of money under the guidance of their parents. You will see after some time that they will start making the right financial decisions.
Educating kids about personal finance is a long process, and it will happen gradually over time. That’s why you should explain it according to the age of the child.
But surely it will give positive results. Understanding the importance of money, he will save and invest, which will definitely make him rich in the future.
