Do your kids understand the concept of saving money, or know how to appreciate the value of money?
Picture this: You walk into a toy store and before long, you might be asked a series of ‘Mama, can I have this?’ and ‘Mama, can you please buy this for me?’
Sometimes, you’ll give in, but will you give an affirmative answer every time you enter the store? Most likely not. Some mothers would quip, ‘Mama has no money today’ or ‘I just bought you a toy last week, your toys are all so expensive, play with what you have.’
Surprisingly, toy stores are one of the best places to introduce your young children to the concept of saving money, even if they are in their preschool years. Most times, they know money is something you give in exchange for something they want, but they don’t really know where it comes from and its value.
Here, we will look at ways to train your children to save money through a weekly schedule, starting from a trip to the toy store.
Time To Talk Money
Before you can even consider drawing up a weekly schedule, they must understand what money is. Children usually hear adults talking about money but don’t really understand the concept.
It appears to come out of daddy and mummy’s wallets – sometimes in the form of coloured paper, other times a shiny card or their handphones.
When your child bugs you for this doll or that action figure, they expect to get it once you make an exchange at the counter. Therefore, use the opportunity to explain the concept of money.
You can do it by presenting your child with different coins and banknotes. Show them the different sizes and values. If they are old enough, they can do the calculation. Show them how to use it. If there is change, ask them to count how much is returned. When you do it over and over again, you instil the concept of value in them.
Another stand-alone subject when it comes to money is recognising wants and needs. You may have little DIY flashcards showcasing items categorised under ‘needs’ like food, shelter and clothing; and ‘wants’ like a toy, smartphone or a bicycle.
Opportunity to Earn and Save Money
When they find out that money can run out (gasp!), they will naturally ask where they can get more money. You can explain that most daddies and mummies go to work, but then you’ll have to start explaining how time can earn money. And there will be more questions, because children are children—most of them are inquisitive.
However, the best way to teach them about saving money is to allow them to earn some money every week.
There are two parts to this:
First: You can give them a weekly allowance.
Second: You can allow them to do specific jobs outside the scope of their house chores to ‘earn’ cash. You have to be very clear on what constitutes as house chores and what is not.
The pocket money or earnings that you hand to them weekly should be tracked. Have them write it in their notebook, or if they have a tablet, they can use an application to note down the money they’ve accumulated.
Have a Saving Money Challenge
Everything becomes extra fun and exciting when it is a game. Therefore, you can make saving a challenge.
You might have come across the 52-week savings challenge where, for the first week of the year, you save RM1, and you increase it every week until the 52nd week, in which you’ll be saving RM52.
Though most parents would not trust their young children with a sum over RM50 a week, a little tweak in the challenge would make it child-friendly.
Use seven envelopes with the days of the week written on them. You can get them to start on Sunday or Monday as the first day of the week, when they will keep an RM1 note in the envelope. It increases by RM1 as the days pass until the last day of the week, in which your child will have RM7 in the final envelope to keep. That is RM28 in a week!
When the week is over, they can empty it into their piggy bank. In six months, you can bring them to the store for them to get the item they’ve been saving for. As for the additional stash, you can bring them to the bank (an exciting journey for them because they get to do ‘adult things’) to deposit the money.
How do they get that money to save? Refer to the point before this.
Why ‘Spoil’ Their Childhood and Have Money Challenges?
I know, I know, money is such a troublesome thing. But if we don’t start instilling a good attitude towards saving money and spending, the habit might be a little harder to ‘stick’ as they get older.
Though I prescribe to the belief that the best things in life are free, most of the things that allow us to experience the ‘best things’ do cost money. As parents, we want only the best for our children, and one way to provide them with a bright and financially secure future is to lay a strong foundation when it comes to money.
When they know the Six Ws (What, Who, Why, When, Who and How) when it comes to money, you can be rest assured that they will be equipped with sufficient financial literacy when they leave the nest.