Thursday, August 6, 2009

The Habit of Saving

I come across an article about teaching a child how to save money so they know how to manage their own savings when they are old enough.

In my opinion, to teach a toddler how to save is important as the values of saving has to be instill while they are young. If not so they will not know how to save money but keep on spending moreover young kids these days are so used to the luxury of life that they do not know how hard it is to earn the money. Spend wisely must be taught as well, how to spend and what to consider when buying something. Is it a want or a need? Is it worth buying? Do you have the kind of money to buy the thing?
To Teach a child you need to have a few jars/ piggy bank for the kid. One for savings only, one for spending, one for charity. Three simple jars to start with then when they get older introduce more jars, as more responsibilities come by their way...... like the spending jar will divide to wants and needs. So slowly the child will understand how to manage their own savings properly.
I know a lot of us used to learn by saving money from young, the more the better, but we do not know how to manage it well; like how to allocate our money to buy insurance, allocations for buying cars and houses, later investments etc. Lots of these comes into our minds in later years. But if we have known all these earlier, plans can be made and maybe we can even multiply our savings and our hard earned money better.
So the earlier we instill how to manage savings to a child is better, so they will not spend too much and yet adequate to survive.

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