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Teaching Your Children How To Save Money

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Children need to learn to save money if they’re ever going to appreciate the value of it. Indiscriminate spending without saving creates the illusion that money is only as valuable as the object it’s spent on. The real value of money – as investment capital or as a reserve for a necessary purchase – will be lost.

A Child’s poor habit of spending money indiscriminately will carry over into adulthood. That kind of financially irresponsible behavior will produce a paycheck-to-paycheck lifestyle, debt, and financial dissatisfaction.

There are a couple of things you can do that will help you teach your Children how to save money.
Talk About Money with Your Children
Tell your Children where money comes from and how its value is derived. Talk to them about the Federal Reserve system, inflation, foreign currencies, credit, and banking.

Teach them the real value of money – as a source for investment capital. Teach them how their money can work for them and make more money by being invested in businesses, stocks, bonds, and other financial securities.

Talk About Family Finances Openly
Allow your Children to hear you discuss car payments, mortgages, debts, investments, and other financial issues. Don’t treat these topics as taboo by discussing them behind closed doors, out of earshot of your kids. Being secretive will stigmatize the topic of money and discourage your kids from wanting to learn about saving later on. Displaying confidence and being open and honest about the topic of money will encourage your Children to embrace financial concepts like saving.

Give Your Children a Reason to Save Money

If you tell your Children, “Save money,” they’ll reply, “Why?”  Explain to them that if they’re ever going to want to make a purchase – down payment for a car, vacation, dirt bike – beyond what’s affordable in a week’s paycheck, they’ll have to save their money to do it.

Incentivize Your Children Saving
You can match the amount that your Children save, agree to co-sign a major purchase if your Child saves the down payment for it, or give your Children new privileges or rewards when they have saved a specific amount of money.

Lead by Example
You certainly can’t teach your kids about saving if you yourself don’t save money. Not only must you save money, you must demonstrate and prove to your kids that you save.
If you bought something with saved money, tell your kids that you had to save for a few months before you were able to afford it.

Start saving with them. If they save money, you save some money. Saving together will motivate both of you. Both of you will have the others’ interest vested in you and this will make the experience more personal.

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