Providing children with a basic understanding of how money works is an important part of their education. While they may learn about maths and science at school, they will form their ideas and understanding about how to handle finances at home as they watch and learn from the adults in their family and observe their attitudes towards spending and saving.
Teaching kids about money and how to save for the upcoming holidays can be easy and fun, and will also provide them with much-needed skills for a successful future. Here are a few ideas to get the ball rolling.
1. Pocket-money management
Regular pocket money gives your children the opportunity to spend, save or give, depending on what they need or want at the time. It’s a good idea to have a special place for them to keep it, whether it’s in their own account or in a coin jar, where they can watch the money grow and be responsible for its safekeeping.
They may want to spend it as soon as you give it to them, but if they are hoping to buy gifts or do something special during the holidays, this is the perfect opportunity to teach them the benefits of saving and reaping the reward – which is being able to get what they really want.
2. Budget basics
There is so much going on during the holidays, and this comes with many teachable moments. Whether it’s choosing between a new toy, a trip with friends and a fun activity, basic budgeting skills will provide them with the opportunity to make their own decisions about where their money goes and what they have to say no to.
Draw up a simple budget that takes into account their pocket money and their priorities. Talk things through with them and help them to understand how much things will cost – whether they need to borrow money from you, or do extra chores in order to make up the difference. There are many simple ways to help them understand the value of money.
3. Do they know what they want?
If your child has an idea of things that they want to buy or do during the holidays, then you can make a list, work out how much it will cost and save money accordingly. Having goals to work towards will encourage them to stick to the savings plan. The simple budget that you put together will help them stay focused and reach their goal.
4. Take them shopping
Start with a list of ingredients and head to the supermarket. Tell your children that you have a certain amount to spend on a meal. Allow them to choose the ingredients and work out how much they are spending and how much they have left. If they go over the budget, then you can show them how to go back to choose cheaper ingredients where necessary.
This process will help them understand more about how much things cost and sticking to an agreed-upon budget – a lesson that will help them well into adulthood.
5. Offer savings incentives
To help add to the excitement of achieving their set goals, you could offer them an incentive to save – for example, if they want to save enough money to buy a toy or an outfit for their upcoming holiday, encourage them by offering to pay the difference once they reach a certain amount. If they need R500 you can then perhaps offer to pay R200 once they have reached the R300 milestone, or offer to match the amount they save rand for rand.
The information contained in this article is for information purposes only and does not constitute professional advice.
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