Do you give your children everything they want? More than likely, you don’t (or can’t). One of the most important things you can do as a parent is to teach your children how and why to save money. This simple action will be something they will use for the rest of their lives and maybe, just maybe, they will find financial security in the midst of struggle. But how do you do this?
One of the most important things you can do is to set up a savings account with your child. At BancorpSouth, we offer youth accounts with special features to educate kids about saving money for their future. You can review the statement with your child each month to make sure they understand about interest and the importance it plays in earning money over the duration of their lives.
A critical way to teach your children about saving money is to have multiple conversations about understanding what they need versus what they want. Explain to them that sometimes you cannot get everything you want, but if you set up financial goals, you may be able to get more of what you want than you would have otherwise. Show them some of your family’s financial goals and discuss ways the family can work together to achieve them. This can be done in a family meeting or just while you are shopping with your children, whether at the grocery store or a local department store.
You should also discuss the many different options they have when it comes to saving money for something they want. For example, if your daughter would like to purchase a favorite toy at the store, you can help her set up parameters that will help her earn enough money for that toy. Does she babysit or get an allowance for doing chores around the house? If so, how much of that money should be saved? How much can be spent? Should she use all of the money she obtains in one month to purchase the item, or should she save half each time she babysits and purchase the item in the near future?
The younger generation likes to have things “now” and so credit problems continue to exist because instead of saving money and using credit when appropriate, it is now used for everything. When you teach your children to save, you are teaching them a valuable skill comparable to any other skill they will use in their future.