Your children imitate you all the time. Take advantage of that desire to be just like you and start them on the road to an important habit—saving—that will help them all their lives.
In the youngest ones:
- Create a clear awareness of the value of money— How many times has your little one told you that if you need money all you have to do is go to “that machine” that gives it to you? According to U.S. News & World Report, since children see their parents pay in several different ways (with cash, a credit card, or apps on their cellphone), the value of money and the way it’s gotten is not at all obvious to them. Sometimes, they don’t even see the relationship between buying and taking money out of a wallet. Take time to explain to them how you paid for this item or service and where the money came from to buy it.
- Teach them to save money in a piggybank— Tell them that if they put all their change in it, they’ll see how fast it fills up. To make this exercise a totally visual learning tool, use a transparent container, like a used pickle jar, instead of the classic piggybank, so your children can see how the money they’re saving mounts up
- Create an awareness of what earning money entails— Use a simple exercise to teach them the principles of earning money through work, making a budget, and saving. Try this: Encourage them to earn money by doing chores around the house, then writing down their expenses and setting aside some of their earnings as savings to buy the toy or game they’ve been wanting.
- Help them restrain their impulse-buying— Children are much more interested in spending money than earning it. The experts in Popular Financial Planning tell us that parents have to guide them. If your youngsters have already earned some money, show them the benefits of having goals for saving. Show them how to plan their savings in order to buy a bicycle, a video game, or those tennis shoes that are all the rage. You can even encourage them to save in order to help with their own expenses on the family’s vacation, or for their guitar lessons. The secret, experts say, is to allow them an indulgence once in a while. In the midst of the saving process, let them put aside some money to buy some little something that will gratify the desires they have. That way, they won’t become discouraged while saving for a long-term goal.
- Teach them not to spend the money people give them on special occasions— If their grandmother, aunt, or uncle gives them a holiday or birthday card with money, encourage your children to save, ideally, the whole amount, or if it’s just too tempting, at least a good part of it.
For older children:
- Make sure your college-age kids know that money isn’t infinite— They probably have an allowance. Let them make their own decisions about spending for expenses, but if they run short on cash, don’t rush to solve their problems. That’s the only way they’ll understand the importance of structuring their budget so they’ll have enough to cover their necessities.
- Include your teens in some important financial decision— Explain why you made the decision to purchase a less expensive product in one case while spending more money in another, considering that higher quality and more features justify the extra money.
- Teach them the difference between saving and investing— If your teenager or college student has just earned their first check at their job, you can explain the benefits of a savings account. That way they’ll see how money grows when one makes long-term deposits.
- Set an example— Make sure your children see that knowing the value of money is part of the family philosophy, and that their parents’ behavior reflects that.
Savings accounts are the most effective tool for teaching youngsters the value of money. And Popular’s Club del Ahorro can help them understand the importance of saving and start them on the road to a financially responsible future. Being members of the Club and having their own savings account makes them feel that they’re part of the processes of managing money and saving, actions we take in our daily lives.
El Club del Ahorro offers financial education, teaching them the importance of putting money away for the future so that tomorrow they’ll have more financial possibilities when purchasing that first car, going to college, traveling, or just having money when retirement comes.
Putting money, and bank accounts, into good hands is part of the foundation for ensuring secure family finances.
For more information about how you can help them save, visit www.popular.com/en/savings-accounts/club-ahorro/
The information and general descriptions contained in this article are designed to help you understand about the factors that you should generally consider when evaluating the appropriateness to your retirement plan of any strategy or investment. Any descriptions herein are solely for informational and educational purposes and for your independent consideration; they are not intended to be regarded or construed as advice or a suggestion for you to take (or refrain from taking) a particular course of action. In providing this information, we assume that you are capable of evaluating the information and general descriptions contained herein and exercising your independent judgment. This document was prepared for informational purposes only and should not be considered as an advice of any kind. Banco Popular de Puerto Rico, its subsidiaries and/or affiliates are not engaged in rendering legal, accounting, or tax advice. Should legal, accounting, or tax advice be required, the services of a competent professional should be sought.