Parents have the responsibility to teach their children a healthy perspective and attitude towards money and saving. A past study by the University of Cambridge suggests that kids as young as seven years old can already learn the basics of using money wisely.
The first and most basic lesson children should learn is to save money from their allowance. Money is what people use to acquire their essential needs; and handling money is a responsibility rather than a privilege. However, there are two obstacles that may hinder this sense of responsibility: one is the attitude of entitlement and second, not delaying gratification.
An entitled child will likely look at an allowance as “free money.” On the other hand, one who can’t delay gratification will end up spending money on things than only give pleasure. Both of these will prevent a child from developing the habit of saving.
But no need to worry. According to psychologists, watching out for and acknowledging signs of entitlement in children gives an opportunity to correct them early on. According to Amy McCready, founder of Positive Parenting Solutions, these signs include expecting bribes for good behavior, not helping others, being more self-concerned and the constant need to want more.
To delay gratification, there are steps to teach kids to become a patient “postponer” and hopefully a better money saver. Psychologist and published author David J. Bredehoft, Ph.D said these steps include creating an environment where the self-control is consistently rewarded; modeling self-control for the children; teaching them to use distractions; developing and practicing “if-then” plans and teaching them to set achievable goals.
Once these have been dealt with, you may start teaching them about savings. Start by talking about wants and needs, and how they should set aside a fixed amount as savings from their allowance. As a savings apparatus, a piggy bank can be a good starting point for toddlers. Older kids can already have their own savings account with a bank.
Starting young is important. Good thing that BDO has a Junior Savers Account that parents can open on their children’s behalf. It’s easy to set up, and has an affordable initial deposit and a low maintaining balance. To read more about it, go to https://www.bdo.com.ph/personal/accounts/peso-savings account/junior-savers
In addition, parents can also help grow their kids’ initial fund by scheduling regular deposits using their BDO Digital Banking account. Just set the amount and date of transfer and easily, the kids’ savings will grow while teaching them more money lessons.
