The Best Money Saving Tips You Should Teach Your Child

Teaching your child about money is one of the most essential life lessons which will help them prepare for adulthood. Offering them money saving tips will allow them to be financial-savvy and will provide reassurance that your child has the essential knowledge to become financially secure. 

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There are a number of money-saving tips that can be taught to your child now. Here is some of the most basic advice, which will offer your child several benefits.

Necessities vs luxuries

Teaching your child the difference between wants and needs is essential in order to help them determine their priorities when it comes to spending money. You should start by explaining how food, clothing and shelter are the three most important things that keep us alive. Without them, we would not be able to buy our favourite things like toys, fancy clothes and smartphones.

The best way to explain necessities and luxuries is by taking them grocery shopping and giving them a role of responsibility. This could be letting them hold the grocery list and reading out what you need, and if they are old enough, you can discuss price. Your child will most likely pick up their favourite sweets or ice cream, and you should explain that if they want them, they need to give up something else on the list. This will help them understand the concept of sacrifice in relation to budgeting and saving money.

Set up a savings account

To ensure your child is both financially aware and secure, you should open a savings account for them. There are several options to consider, such as a kids’ monthly saver, which is a flexible savings account that can be accessed at any time. If you want your child to have a significant amount of savings, you should open a Junior cash ISA. This is a tax-free account which cannot be accessed by your child until their 18th birthday.

A savings account is beneficial for the future, as this will allow them to save up for a deposit on a house, or they could even opt to invest. They could choose to invest in stocks or for a more stable venture they could consider property investment. This is an extremely lucrative market, and they could achieve success if they work with experts like RW Invest. This company will advise you of the short-term and long-term benefits, which can be used to fund your child’s lifestyle and provide them with security when they retire.

Give them an allowance

One of the first steps in teaching your child about finances is to give them money of their own. It doesn’t have to be a lot, and you should figure out a specific amount you want to give them. To determine allowance, you should consider the age of your child and what they would need or want to buy. 

You could also tie in allowance with chores, so your child understands the value of money and how to earn it. This is a great way to prepare your child early on about employment and will also allow them to appreciate the hard work that you need to put in to become financially stable.

This is a collaborative post.