Teach Your Child The Value Of Saving Money
Created by Dr.Sonali Bassi Updated on Nov 16, 2019
When my son was about 3.5 years old I distinctly remember a very interesting conversation we had and I must share it with you.
On most of our trips to the mall or market it was a punishment for us because he used to put his hand over a toy and we would buy it for him. We loved the smile and happiness that this unnecessary and expensive buy brought on your childs face but gradually we begin to realize that slowly it was burning a big hole in our pocket.
Gradually we even came to a stage where, my son actually could not choose a toy in the shop because he had most of them it was Funny! Or so we thought till the next time when we visited the mall my son said, “Mama I want this toy !” rather than just saying a blatant refusal I told him “it is too expensive and mama is not carrying enough money”.
My mother who was accompanying us (being a wonderful yet indulgent grandparent) was hurt by my statement and said, “this is not right and that he is too small to understand this”. Even before I could give her an explanation, my sunny boy tells me, “mama lets go to the ATM and get money; just put your card in and the money will start coming out”.
I was dumbfounded as he had accompanied me to the ATM only once before. When I answered back that there was no money in the ATM he said lets go to the bank. Everytime I remember this incident a smile comes across my face.
Also Read: Pocket money & Your Child- 5 Do’s and Don’ts
The moment of Truth!!
That night we as parents decided it was time to teach our child the value of money.We decided we would initiate the process of making him understand about “ Money” and we later found out that we were underestimating his ability to understand and comprehend matters regarding Money.
Important Life Lessons that may help in the process
- Making the child understand that it takes a lot of hours of hard work to give them the comfortable life they lead.
- They must learn the value of money but at the same time not get attached to it. Money is like water it has to flow and flow it does.
- Prioritizing how the money should be spent goes a long way.
- Making the child understand the difference between a Need and a Want.
- It is more valued if you make them work for it.
The next day we made our son sit down and emphasised how there were so many needy kids that did not have a single toy then we further reinstated the same same fact by explaining to him that he could only buy one gift in a month and before that gift came in he would have to to donate any old toy of his to a needy child. At first he did not quite like the idea but over the years now he is on board with it.
Later to further facilitate his understanding we also gave him a piggy bank where he collected his savings ( which was mostly the change that his grandparents gave to him when they visited) and later bought what he wanted.
In the last two years he has learnt that he cannot waste money, infact if I am shopping in the mall he checks me by saying that I am wasting money ( Can you believe that ).
The children need to be explained in a comforting manner that they must take care of their belongings and they are responsible if something happens to them. They should be made aware that buying a thing is neither easy noe appropriate again and again. Asserting that all their toys must go to the appropriate place once they are done playing with them will instill in them a sense of responsibility for taking care of their belongings.
Another instance which further reinforces the point that I am trying to make is when a family friends of ours who have a teenager, lost a camera on a school trip probably because of carelessness. In order to teach him the value of money his parents told him to compensate for the camera that he had lost. Mind you, they belong to a very well off family but the child had to forgo his birthday party .When I heard this I felt a little bad but the child learnt the lesson of his life (though he still got the i-pod he wanted as a birthday Present).
A year ago my son really wanted a WI game so I told him to start saving money in his piggy bank. Everytime he would help us with a household chore we contributed to his piggy bank. We explained to him that he might have to save for the whole year since the game was expensive.Very patiently he collected the money but was very disappointed to see that inspite of saving all through the year he had not collected enough money and his birthday was fast approaching. We told him not to worry and pooled in the balance amount. I am proud to say that by then my son had understood what we wanted him to learn all along.
Another good place to teach children how to spend money well is the supermarket, by giving them a pre fixed amount of money and asking them to make maximum use out of it.It really is an eye opener for them when they see the money spend in realtion to the things that they have bought. Our childrens are born in the age of I Pads , hi tech cell phones , video games and many other gadgets but we as parents need to make them realize the importance of all that they have but at the same time they should not forget how hard their parents have worked to make sure they have access to these things.
A penny saved is a penny earned, how many times have we heard this…. and this is so true.
As soon as our children can learn to count we should start our small lessons in handling little money.We should help them understand how to spend money wisely this will help them take intelligent and well informed decisions in the future.
Image source - Parentune archives
| Jan 18, 2013
Rightly said Dr. Bassi, that in so many matters,including this, we underestimate our children's ability to understand an issue. Making themn understand the diff. between a Need and a Want - makes it quite simple to drive home the actual point. We have also indulged our only child over the years, however in the recent years, we have been explaining to him that the value of money and how hard earned money should be spent wisely. In fact he once mentioned that at 18 he would want a particular gadget, and we told him that he would be able to buy it with his own money since he would be doing a summer job or something during that time.
| May 30, 2013
I totally agree with this post and I do practice the same with my 7 year old son. In addition to earn and spend money, we have implemented the process for writing account of his own money. All of the credits (earning by my and my wife's vehicle cleaning, in cash gifts from elders, etc. ) and all debits (spending on his toys, gifts to the friends and family members, etc. ) in to one account book and keep track of all the money.
| Jun 20, 2013
May be I'm late to react but I totally agree with Dr. Bassi since mine also is the same kind of story. My son almost have a toy shop at home. Now when we have explained the value of money he calculates each and every purchase he makes. He even asked me how one can earn more money. I found it hard to answer this since there are numerous ways to earn money and I was afraid which way would attract him, so I told the best way to earn money is by studying well. I'm not sure I was right but I could see the difference in him. The other day when we were watching Discovery Turbo there was a program showing the features of Lamborghini Gallardo. He asked me how much does it cost I replied 3 crores. He said I'll study well and buy that when I grow up. I'm confused a bit is it the right thing to do? Because somewhere in my heart I felt I'm infusing the greed for money in to his mind. Kindly advise.
| Jul 17, 2013
Hari you are not doing anything wrong ,ultimately our children are going to be in this big wide world where they are going to be exposed to all these temptations. We as parents need to instill in them the correct values and hope they work for our little ones. I actually made my son contribute to his birthday party last year because he wanted to have one. I feel he is young for a 6 year old but surprisingly all this makes him more responsible and his demands have definitely come down.
| Jul 17, 2013
Hari you are not doing anything wrong ,ultimately our children are going to be in this big wide world where they are going to be exposed to all these temptations. We as parents need to instill in them the correct values and hope they work for our little ones. I actually made my son contribute to his birthday party last year because he wanted to have one. I feel he is young for a 6 year old but surprisingly all this makes him more responsible and his demands have definitely come down. T
| Jul 17, 2013
I hv seen such case with my sisters sons... n my jiju buy whtever they demand... or ask to bring. now they both hv grown up and they dont hv value for money. Before my marriage I experienced all these. Whn my son born... since bigning.. we dont put him in dis habbit... i dont buy whnever my son ask me to buy... i just say this belong to uncle... we hvnt bought so we cant tk this... or just ask shopkeeper... uncle u wont give us na... n he replies NO. my son (now 3. 5yrs) understands. I agree 2-3cases out of 10.
| Sep 05, 2013
hari,i have come across the concept of toy library in mumbai. it is a very good concept. every child has the interest in a toy for not more than 2 day or so. after few days he looses his interest in the toy. he needs a new toy to play. going with this it would be difficult for parents to fulfil his wishes. the child also if his wish is not fulfilled will look else where to fulfill his dream!at times it could be disastrous.
| Dec 02, 2013
This is absolutely true. Even my 3 year old boy never threw tantrums for toys. I have always told him its difficult to earn so much money. He is 3. 5years now and he tells me the same thing when i go vegetable shopping. We really do not want to understand how much our kids can understand. We have to make an effort to know where they stand.