You just realized that it is time for your child to know the importance of saving but then he is older. If you taught him saving earlier, you will have no problems pointing out its importance by now but know that it is not yet too late. Regardless of the age, saving can still be done.
As your child grows, he needs more than goal charts and illustrations. He needs to know some basics of saving and what it can do to him. Here in Singapore, savings can take one far. You are there so you can guide him through it all. Here are some tips to encourage saving for your older kids:
- Open a savings account: The first thing that you need to teach him is the concept of interest. Explain that the interest can increase his funds and with steady return. The more he saves the more interest he can get. Now that you explained it, it is time that you open a savings account. There are different banks that offer high yield accounts and you need to decide which bank offers the most.
- Help prioritize: This is the easiest part but when mishandled your child can have conflict of interests. Let your child write the things that he wants to spend money on. The list may be long. This is the reason why he needs to prioritize. He cannot possibly buy all things. You can help him by making the list short. Prioritizing should be considered. Make sure to teach him the value of long-term goals. After prioritizing, your child can allocate amount to each of his goals.
- Let him make mistakes: It is kind of disappointing but sometimes, best lessons are extracted from bad or poor decisions. When your child is young, he will commit many financial mistakes leading to losses and the feelings won’t be great but that will teach him something at the end of the day. The lessons he will learn can change his type of thinking and it can serve him well in the long run.
- Talk about money: You can talk about money without discussing your salary in front of the child. When you talk about it, it is about discussing your arrangements and financial plans in the future. For example, discuss about saving for retirement. This can give your kids idea that savings is a lifelong endeavour and it is serious.
- Play games: There are plenty of games that can teach kids about important financial concepts. There are games that are not that hard to understand for example The Game of Life or Monopoly. It can teach children important money management and the significance of planning ahead.
It is crucial that you teach your child to save. Remember that saving is a significant step in preparation for financial responsibility which can lead to a secure future. You won’t go far if you just preach. You have to practice it as well so your child will know that you are also a patron. The point here is to set a good example and be consistent. When kids grow up, they will emulate your habits so better be a good one.