Help get your children/grandchildren into a savings habit

Help get your children/grandchildren into a savings habit

It’s a real challenge to get your children or even your grandchildren interested in the concept of saving. We know that the earlier you start saving, the better prepared you will be for the future. Talking with children or grandchildren however, about anything other than the next 24 hours doesn’t capture their fertile imaginations and the future is of little interest to them.

So how do get them into the savings habit?  Here’s a few top tips.

1. Talk with your children about money from an as early an age as suitable.  It shouldn’t be a taboo subject and the days of discussing money as “vulgar” are well and truly gone. Indeed, there is currently a Lloyds TV ad running on the need for families to discuss money.
2. Discuss the difference between “wants” and “needs”. This is a challenge in today’s world of instant gratification made possible by our digital environment. The concept of anticipation is an alien one to millennials and beyond but it’s important to make the distinction about what is necessary compared to what is desirable. Instilling that concept from an early age will go a long way to making informed decisions in the future.
3. Let children earn their own money. Even if it’s just pocket money, make sure that they do something like a simple chore in order to receive it. As they get older encourage them to take a part-time job to help them understand the importance of earning their own money. This also gives them an early and useful perspective on the cost of living.
4. Help them set some savings goals. Start by identifying something that they might want to buy e.g. a game, sports kit, clothes etc. They need to be able to calculate how much they can save and how long it will take them to have enough to buy the item they want. This is important to develop the concept of money that is put aside over and above their usual spending habit as well as planning. It will allow them to prioritise how they spend their money.
   The next step is to encourage them to save on a regular basis even when they don’t have a specific project or item in mind. This is the start of getting them into a savings habit.
5. They’ll need somewhere to store their savings beyond the piggy bank as they get older. There are some restrictions on people under the age of 18 when opening accounts, but most banks have options such as a parent being a named as a joint account holder. There are of course emerging online alternatives such as gohenry.com which also promotes education about money to children.
   Whichever you choose, it exposes children to the institutions that underpin money and some of the ways that they can start to save.
6. Once they have their account set up, encourage them to track their money. With nearly all banks being online, then this is a much simpler task. Indeed, many banks now alert you of your spending as it happens. Keeping track of money whether its spending or saving it will help with financial planning in the future.
                                           

All the above is just common sense but it should be an important part of children’s education to help safeguard their future.