4 Money lessons this holiday
It’s the long holiday. Your children will be away from school and with you at home for at least eight weeks. Looking forward to building memories together? We bet you are. This holiday is, however, a perfect time to ingrain lifelong money lessons in your children. You can teach them to value money. Let them understand that mum and dad work for money and that most of the things they enjoy were bought with money and should be handled with care.
The practical steps below will help you inculcate these lessons.
- Kickstart a savings culture
Children get loads of gifts, many times monetary, from their parents and other family members. Teach your children to always save a part of any amount they are given. If they are at the age where they get stipends, teach them to save a fraction of their allowance. You can begin with a visible piggy bank where they physically drop the money and progress to a young savers account or Money Market Fund as they get older. Share their account balances with them periodically so that they see their money growing.
- Let them set savings goals
Saving is significantly easier when you are saving towards a goal. Teach them the value of financial goals. Let them identify something they really want. Calculate the cost and how long it will take to save for it if they save an amount from their daily allowance. Keep a record of the savings and track. Remind them periodically- e.g. five weeks to your new Play Station game. When the time is done, and the money accumulated, open the safe and buy them the game. They will feel very fulfilled and value the game.
- Allow them to earn money
As they mature, it’s important to teach them the importance of labour and its connection with resources and fine living. You could give them specialized tasks that are not typically among their chores and pay them for it. If there are old enough to work during the holidays, encourage them to get safe holiday jobs.
- Celebrate their milestones
Nothing propels progress like encouragement and reward. Celebrate their saving milestones with lavish praise and treats. If your child saves consistently for a whole school term, for instance, you could take that child to the movies as a reward for consistency. The child who saves for a PS game can also get ice-cream in addition. These rewards communicate that doing the right thing is always beneficial eventually.
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