Sunday, 23 October 2016

Few Ideas To Teach Your Children To Save Money

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Everyday spending decisions can have a far more negative impact on children's financial futures than any investment decisions they may ever make.

Here are a few ideas to teach your children to save money at any age:

1. Offer Rewards for Saving Money. Consider rewarding your child for saving his or her money. Much like my credit union, which offers t-shirts and other prizes, you can offer prizes to your children. For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves. Try stickers, an extra 1/2 hour of video games, toys, or whatever motivates your child.

2. Setting goals is fundamental to learning the value of money and saving. Young or old, people rarely reach goals they haven't set. Nearly every toy or other item children ask their parents to buy them can become the object of a goal-setting session. Such goal-setting helps children learn to become responsible for themselves.

3. Allocate your child one person to shop for this Christmas, this could be a friend, sibling, parent or extended family member, but ideally it is someone your child knows well.

4. Talk to your kids about identity theft and the importance of protecting personal information from strangers. This can be done while completing a school application form, writing a check or paying for toys at a toy store.

5. Help Your Child Prioritize. Have an older child write out a wish list of things he or she wants to spend money on and prioritize that list. Ask your child to think long-term as well. How about a nice laptop for college, a graduation trip to Europe, or even the down payment for a house someday? Then, have your child allocate an amount of their allowance, or “income,” to each goal. These are the beginnings of a financial plan and this type of thinking will serve your child well in the long run

6. Take children to a credit union or bank to open their own savings accounts. Beginning the regular savings habit early is one of the keys to savings success. Remember, don't refuse them when they want to withdraw a portion of their savings for a purchase--This may discourage them from saving at all. You can also introduce children to U.S. savings bonds. Bonds are still a good value, costing one-half their face value and earning interest that in some instances will be tax-free if used for a college education. Perhaps more importantly, when given as a gift, bonds will not be spent immediately, reinforcing saving and goal-setting lessons.

7. Older children might like to research the prices of items on their list on the internet. This is a great way for them to compare products and prices to determine which is the best value for money.

8. When paying at a restaurant, ask the kids how the meal should be paid: credit card, cash or check. Talk about the pros and cons of using a credit card.

9. Play Games. There are a number of games available to teach financial concepts to children. Monopoly and The Game of Life, for example, can teach money management skills as well as the importance of planning ahead. Rich Dad Cashflow for Kids is another good option focused on money management.

10. Use regular shopping trips as opportunities to teach children the value of money. Going to the grocery store is often a child's first spending experience. About a third of our take-home pay is spent on grocery and household items. Spending smarter at the grocery store (using coupons, shopping sales, comparing unit prices) can save more than $1,800 a year for a family of four.

To help young people understand this lesson, demonstrate how to plan economical meals, avoid waste, and use leftovers efficiently. When you take children to other kinds of stores, explain how to plan purchases in advance and make unit-price comparisons.

Show them how to check for value, quality, repairability, warranty, and other consumer concerns. Spending money can be fun and very productive when spending is well-planned. Unplanned spending, as a rule, usually results in 20-30 percent of our money being wasted because we obtain poor value with our purchases.

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