There are differing views as to how and when is best to teach kids to save money. Some people may be good at saving while others will not be. That is why it is important to start inculcating this discipline early in life so that it stays with them. At a tender age, their minds are still impressionable and a parent’s influence should never be underestimated. Teaching your child money management can be an uphill task. Most children would want to spend the money they receive immediately rather than saving it for a rainy day. To encourage savings, you need to show them the benefits of saving either in a fun and interesting manner.
Here are 4 ways to teach and motivate your child to save money:
1. Match their savings
For every dollar your child saves, offer to match their savings. You may start off with 100 per cent when they are little. Once they grow older, matching 25 per cent to 50 per cent of what they save might be reasonable. What percentage you decide on, always remember to follow through with what you promised them.
2. Provide a piggy bank
As mentioned earlier, children need to learn that saving money is a fun and enjoyable process. Having a piggy bank such as RHB’s automatic personal ATM will do just that. It allows children to withdraw money using a cash card and password and also calculates the coins deposited. A piggy bank as such will definitely make putting money away more appealing.
3. Open a savings account
When you are deciding on which savings account will be best for your child, remember to look for a financial institution which accepts a low minimum deposit, waives fee for your child’s safe deposit box and is child-friendly. You might want to consider one that offers other benefits like RHB Junior Banker account. It not only provides personal accident insurance coverage for the child but also life insurance coverage for the parent.
4. Using positive reinforcement
Praise your child whenever he or she saves despite the amount. This is the simplest yet most important advice anyone can give a parent. Using positive words such as “Good job!” or “I like how you’re saving every penny you’ve got!” not only builds self-esteem and inspires confidence in children but encourages them too.
This article was contributed by RHB Bank.
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