May, 2020

Teaching your Kids About the Value of a Dollar

By Gary Thandi

Have you ever had that conversation with your children, one that maybe your parents had with you when you were a kid, that starts with “When I was your age ….” You know, it’s the one where you tell them how much harder life was back when you were younger, and how hard you worked when you were their age … while they just sit on the couch and play video games?
Yes, that’s one of the signs that you are becoming just like your parents. And that’s not such a bad thing. Having a conversation with your kids about the importance of working hard should start early, and should be repeated often. But talk is just talk – there are also many things you can do with your kids to teach them the importance of saving and valuing whatever money they have.

Here are some tips on how to teach your children to save:

• From an early age, have them pay for purchases. Hand them the money to give to a cashier, so they can understand some basic concepts about shopping and what money is used for
• Be a good role model. If you value saving money, chances are so will they. If money burns a hole in your pocket, it probably will for them too
• Get them a job. If they are old enough, get them a paper route (although be prepared to do it yourself too – on bad weather days when it’s icy or when your child is sick, you need to be ready to take over the route). Make a big deal when the cheques arrive – for example give them a big hug for working so hard, and tell them the money they earned is a reward for their hard work. If they worked hard, they probably won’t want to spend their whole cheque the second it arrives. It doesn’t have to be a formal job: you can give them an allowance for doing household chores too
• As the parent, you can set limits on what they can buy i.e. little or no junk food, given its negative effects on their health
• Open up a bank account for them, where they can put in any money they make or are given. You can set up a bank account so it is deposit only, and you can make it a joint account so that you have access to it. Showing your children how that bank account grows (with additional deposits, as well as any from any interest it earns) is a great way for them to understand how quickly money grows when you save it
• Have them set a goal to save up for a large purchase, like a bicycle. This way, they will be less inclined to make the minor purchases – it’s these minor purchases that makes it impossible for them save up for anything. Maybe you planned on buying that item yourself, but they’ll likely feel greater satisfaction knowing they paid for it (besides, after they make that purchase, you can always put the money you were going to spend into their account – but if you do, make sure you get them to set another goal, to buy something even more expensive so that they can keep saving up for it).
• Encourage them to save coins in a piggy bank, and every month or two roll up all the change and deposit it into their account. The more visual you can make it, the better (as children need to see what is going on to fully understand it).
• Teach them the importance of giving back. Talk to them about the 3 S’s: spending, saving and sharing. The 3’s are based on whatever percentages you and your child think are reasonable; your child may decide that for every dollar they have, they will keep 50 cents to save, 40 cents to spend, and 10 cents to donate (so for every $100, they will spend $40 of it and donate $10 of it).

Although it’s already been mentioned, it bears repeating – be a good role model! If you value saving, chances are your kids will too. And then you can look forward to the day you’re a grandparent, and your own child is having the “When I was your age ….” speech with their kids.

Gary Thandi is head of Moving Forward Family Services that provides counselling and support services to anyone who wants it – without any waits.

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