How to Teach Your Child to Start Saving Early in Life?

Learning to save and handle money was one of the things I learned quite early in life. And my parents rightfully deserve the credit. Because they were teaching their child how to start saving early in life.

The Impact of Learning Savings Early

This is my personal story.

In those days, a foreign bank with operations in India gave a money box shaped like the legendary cartoon character, Donald Duck. Every month, they would take me to the bank where I would carefully count the coins and notes, fill up a slip to deposit the money and hand over the passbook for update.

As the amount of money began growing on the passbook, I would imagine the number of things it could buy to satisfy my childhood fantasies.

At the same time, I was reluctant to take any cash from the account. Because I would think whether I really need the stuff. And secondly, the money was growing because the bank was paying an interest.

The Donald Duck money box and that passbook taught me the importance of savings early in life. And as parent, I’ve taught this to my children too.

Therefore, if you wish to teach your child to start saving early in life, here’re some tips from my personal experiences.

Teaching Your Child to Save Early in Life

There’s no shortage of banks in India. Indeed, no other country has such a wide range of banks: Public Sector Undertaking (PSU) banks, private banks, cooperative banks, foreign banks, small finance banks and the new breed of small finance banks.

And of course, there’s the ubiquitous India Post Payments Bank that operates from nearly 160,000 post offices across the country, including remotest areas.

Regardless where you live, here’re some tips about how to teach your child to save early in life.

Send Children on Small Errands

Give some money and send your child to a neighbourhood store to buy something. Upon returning, ask them to list the stuff with price, find the total and count the change. This is the very first step.

A child should know how money works and different denominations of currency notes and coins. And give your child a small tip as token of appreciation. A few coins would suffice. Ask them to keep the coins and give you later, when they add up to a larger amount.

Buy Money Box

Buy your child a money box. The most popular one is the Piggy Bank, which is a best gift idea. You could also create one at home from a discarded tin or jar. Or buy one from any street-side vendor.

Encourage your child to stash away spare change from their pocket money. But ask them to open the money box only in emergencies or when it’s full. Let them watch the money grow.

Open Children’s Bank Account

Most banks offer special accounts for juniors. And often, they give away some attractive gift to the child that aims at encouraging the savings habit. Furthermore, some banks also issue an ATM card with your child’s name and a passbook. Encourage your child to collect money and deposit in their account every month.

Set a specific day of the month to take your child to the bank. And gradually ask them to visit the bank themselves and complete all the deposit formalities, including updating passbook. However, in such cases make sure the bank is nearby. And your child handles money carefully, away from prying eyes.

Take Children Shopping

One of the best ways to teach your child to start saving early is by taking them for your household shopping. As your child to look for buy-one-get-one-free offers, special promotions and other discounts on household requirements. And buy them too. Tell your child how much money you could save because of their efforts to look for bargains.

Another excellent way to teach your child about savings are back-to-school promotions. Help them select schoolbags, books and stationery of their choice that’s available at bargain rates but are of excellent quality. Taking children for shopping, asking them to look for discounts and special offers and appreciating their effort has a magical effect. There are many other ways you can teach your kids about saving money. Gift them some of the money you could save due to their effort as token of appreciation.

Teach Bookkeeping

And finally, teach your child how to maintain the family account of expenses. Give them a notebook. Tell your child how much money you earn or spend during a day and to note it carefully. Help your child understand how household economics work.

When a child learns to maintain the household account, they’ll also learn to keep a check on expenses. And usually, the child will alert you when the expense is higher. This warns you too to curb spending, unless it’s completely justifiable.

In Conclusion

You can be confident that following these simple steps will teach your child to start saving early in life. Saving money and using it properly are an essential life skill they’ll require as they grow. Hence, earlier you start, the better. At the same time, it’s also necessary to speak about ways and means to make money grow. When you take your child to the bank, encourage them to collect and read those free brochures on various savings schemes they offer. And ask questions to a banker, when possible.