As a parent, you can showcase your life as a prime example to your child. They must learn crucial life skills by seeing you. One of them could be saving money and it should be by introducing your kiddo to the piggy bank.
They might feel as it is a fancy toy. However, it is your responsibility to make them understand its utility. Before they get exposed to the actual and complex world of finances, equip them with essential habits. It would help them go a long way.
Financial literacy has nothing to do with school education. Thus, whatever you want them to learn and understand about money, it should be imparted by you. This is because parents are believed to be the best mentors.
You do not need any specialised degree to be able to impart the best financial lessons. Your life wisdom will come in handy. The best way to start with is by letting them understand the piggy bank essentials.
Piggy bank tips aka financial lessons for your young savers
These lessons will lay the foundation for future management of finances. Now, when they grow up, they might have to choose either borrowing money or getting no guarantor loans like options. Then, it will be crucial for them to understand the ways they must pursue to strategise for loan payments.
All of a sudden, they cannot learn and implement any strategy. You need to create the base which will help them to make easy decisions during difficult situations. Piggy bank fundamentals can be a great alternative to achieve this.
Help kids realise the value of money
This tactic will help them drive towards saving money regardless of any occasion. First, they must understand that it is not easy to earn money. On the contrary, spending money can happen at blink of an eye.
For example, if your child wants to add money to their piggy bank, tell them to earn first. Now, they cannot join an office and get a salary. You can simply ask them to help you in household chores.
On completing the given tasks, they will receive a reward as cash. Now, they can follow this step to earn and save money in the piggy bank.
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Let them understand want and need
The realisation that spending money needs no extra effort while saving money needs can hit harder. They cannot realise this all of a sudden. You should use the piggy bank fundamentals to make them learn this.
Allow them to spend some portion of the money they have saved in the piggy bank. At the same time, give them a deadline to refill the amount. Tell that their next wish will require money to be fulfilled.
Thus, if the piggy bank does not have the money, they will not be able to spend for that wish. Besides, suggest them the different ways they can use to add up money. This way, they will understand that spending is easy unlike saving.
Make them understand the impact of setting goal
These immature minds might not understand the complexities of money. They might think that they can save money at any time. However, the reality is that they have to realise it on their own.
Ask them to save a certain amount and they will start on the spot. Now, show them how by setting a goal, they can plan and proceed. To be able to salt away a particular amount, they might need to save a specific amount monthly or daily.
Ask them to achieve the same saving target without a plan. The timeline might be indefinite and this can disappoint them very much. Tell them to follow this strategy when they look forward to buying their favourite toy before Christmas.
It could be that the festival is six or two months away. They should set the goal accordingly to fulfil it right on time.
Let them learn the virtue of giving
It sounds selfish when you will only focus on helping your child learn saving. They should empathise others who needs financial assistance desperately. It is a matter of co-existence and they must learn giving to be the happiest of all.
Now, if they have a friend whose family is financially unstable and struggling, teach them how they can help. Ask them to utilise a portion of their saving in piggy bank to get a gift for that friend. They will taste that feeling of happiness and of sharing is caring concepts at the same time.
The bottom line
If they do not realise the significance of money in their life, they might make wrong financial decisions. It is apparently easy to get a loan from a direct lender in the UK. However, the hidden truth behind the loans is that they come with repayment.
Your child must acknowledge but first, they must know this. You can help them acquire this basic knowledge with the help of piggy bank lessons.
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