The last few days have been an eye-opener for many around the country, the steady increase in tertiary institution fees suddenly set to skyrocket as the government decreases subsidies.
The reality in our country is that for many parents the idea of pocket money for their children is not tenable, but if you are lucky enough to be in a position of privilege you should sow the seeds of financial responsibility sooner rather than later.
So what crafty techniques can a parent use to teach their kids how to save money? Here are a few helpful tips from the folks at Money Crashers:
Make a Savings Goal Chart
Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. You can represent each week with a box and your child can put a sticker in that box once the money from that week’s allowance is set aside.Offer Rewards for Saving Money
Consider rewarding your child for saving his or her money. Much like my credit union, which offers t-shirts and other prizes, you can offer prizes to your children.For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves. Try stickers, an extra 1/2 hour of video games, toys, or whatever motivates your child.
Set a Good Example
One of the best things you can do is let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is “normal.” Plus, since most young children want to be like their parents, seeing you do it will provide them with money lessons that further inspire them to save.Match Your Child’s Contributions
A “savings match” can be a great way to encourage your child to save extra money and get an early peek at the benefits of a company match for a retirement savings program. While we have a standard amount my son is required to set aside from his allowance, if he chooses to save more, we match it.Talk About Money
While you may not want to discuss your salary in front of your children, you may want to let them hear you discuss your financial plan and the arrangements you’re making for retirement, for example. This could simply be having a conversation with your spouse while your children are in the room. In this way, your children can understand that saving is a lifelong endeavour.
The reality remains that saving is and should be something we start planning for ASAP. I’m the first to admit that I get somewhat nauseous when the idea of formulating a financial plan is thrown around, which is exactly why I’m happy for that to be someone else’s problem.
Consequence Private Wealth have been handling the financial affairs of clueless people like myself since 2010 and their strength lies in focusing on four key elements. Below from their website:
- The most valuable advice is given from an objective viewpoint. Full independence from all product providers is crucial.
- In a tough economy it’s worth analysing costs closely. We ensure you understand all your financial fees.
- Clients are put off by overly complex products and explanations – we keep it clear and concise.
- We stay in touch. We review annually but are available to discuss all client items at any point as required.
Who knows, you could learn a trick or two that you could one day pass onto your young ones. Let’s get those piggy banks and saving envelopes chock-full, from the look of things we’ll be paying substantial figures for tertiary education down the line.
[source:moneycrashers]
