Most young people don’t really seem to understand the real value of money. The little or much they get from their parents as pocket money is spent on things that would be termed as 'unnecessary'. These include buying new outfits to keep up with trends, weekend getaways and parties.
For most, saving money is the last thing on their priority list when it comes to finances. Maybe it is because they have someone else meeting their needs, or they anticipate that which is yet to come in life.
However, you can set out to train your child to save from a young age. All hope is not lost if they are much older but it is best to start them off with a good saving culture as soon as possible. As soon as you begin giving your child money for whatever reason, you should start making their children accountable for the expenditure.
Give them information about saving
An effective way of instilling this culture into them would be showing them the advantage of time and information they have. If our parents knew then what they know now, things would have been very different.
Young people have enough time to plan on how they would want their future to be. Saving from an early age means accumulation over time, which means a substantial amount would be available for use when needed.
Having ready information on how to save and benefits of saving money is also an advantage young people have. All they have to do is take the opportunities presented to them and utilize them fully.
Help them plan for the future
Life can be very unpredictable. Without finances, it would be a challenge to live a comfortable life in the future having not planned for it. With time, responsibilities become more and they have their fair share of financial demands. Young people need to know that one day they will also have dependents who will have needs and wants, not forgetting their own.
Everyone would want to live a debt-free life, where the only financial ‘problem’ would be where to invest money. This can be achieved by saving first.
Teach them how to budget
This is simply a plan on how to spend money, with respect to income. Budgeting helps one remain disciplined on expenditure; knowing how to spend and what to spend on. This includes budgeting for entertainment. If something is not in the budget, then it should be a no-go zone.
Open a savings account
Once they start earning some money here and there for instance for some extra chores like washing the car, then teach them to put a percentage of that money in a saving account for it to accumulate interest. By the time they become adults they would have a considerable amount. This money can also help when they want something that is not in your budget.
Teach them to control their impulses
Here you would help them understand the difference between what they need and what they want. Needs are what you require for survival while wants are desires for goods and services that you do not need.