How to Develop the Habit of Saving in Your Child

August 7, 2017 Posted By MCB Funds

Children start developing habits as early as the age of 7. Helping your child develop good habits is beneficial for them for life and helps them evolve into responsible adults.

It is always a good idea to develop the habit of saving in your child as early as possible. This helps the child understand the value of money rather than being overly frugal or extravagant. Here are some of the fail-safe ways to inculcate the habit of saving in your child:

1. Develop the Habit of Responsible Spending:

Do not buy your child everything that they ask for. If they are asking for an expensive toy or game, make them save up for it. This will teach them to truly value the effort which goes into saving and earning. You can also print a picture of the toy or game that they want to buy next to their money box or saving jar so that they stay focused on their goal.

2. Buy Them a Money Box or Saving Jar:

Buying your child a money box and guiding them to save their spare change is always a good idea. It makes the child less wasteful and realize that any amount of money saved is always good for the future. Teach your child the concept of disciplined savings by not letting him open the box till it is completely full and there is no room left.

 

3. Encourage Savings by Matching What They Save:

Another interesting you can do is set incentives for your child. Fix a small amount of money which you add to their savings every time they save a specific amount. For example for every Rs.500 your child saves add another Rs.200 to their savings. This will make them want to save more as they would want to reap more rewards.

 

4. Teach Them How to Invest:

Make your child understand what investing money means. Search for child-friendly investment schemes which are relatively safer than other plans and encourage disciplined savings. A great example of this is the Gulluck Plan, specially designed for kids through which they can save small amounts of money into a “gulluck”. Once this gulluck is filled, they can deposit the amount in their investment account.

 

5. Practice What You Preach:

Kids are incredibly impressionable and learn from their parent’s behavior. In order to make your child actually truly listen to you, you should lead by example. Setting up a saving jar in the house in which you save money is a great way to go. This will highlight the importance of savings and your child won’t think twice before doing it himself.

These little changes in your child’s lifestyle are bound to help them become more financially responsible individuals and make financially sound choices later in life.