Parents can teach their kids the importance of saving through simple financial tasks like managing a savings account
The importance of saving is something too often lost on Americans and rarely taught in school. Personal finance classes are non-existent and have led to the fact that more than half the country faces financial risk of unexpected expenses. One of our scholarship essay applicants writes in about how her parents taught her how to save with simple tasks like managing a savings account and paying bills. Yes, parents can teach their kids the importance of saving right before anyone else.
As a parent, you envision a bright future for your children and that vision probably doesn’t include your child being into debt because they made poor financial decisions. Considering this, how do parents help kids get a better grasp of basic money management knowledge?
In many families, the topic of money is usually initiated around as during dinner table conversations, and sometimes something left to be discussed by adults. And in most scenario, the dinner table could just be the ideal place to talk about financial things. This does not necessarily mean discussing all of your debt or money problems out in the open but rather it could be a brilliant opportunity to allow organic conversations about finances to occur in a casual, relaxed atmosphere where the children can familiarize themselves with basic money stuff. Say for example, if your family is buying a new car, you can use the situation to introduce your children to the concept of auto loans and leasing versus buying. Or if your family is looking for a new property, take the time to discuss mortgages, interest rates and the pros and cons of buying and renting.
When a child is learning how to do something for the first time they naturally get involved and have the tendency to follow the example of their parents. This inclination applies to financial behavior patterns as well that is why it is important for parents to practice healthy money management behavior.
Getting children involved in the family finances while the parents are still able to oversee things is a smart way to instill good behavioral patterns that will last once they are out on their own. So many of the daily activities that occur at home are in some way related to money or finances and can easily be turned into a teaching opportunity for kids to learn and apply.
Today’s essay is by Maybel Perez, a student at San Diego City College in Managerial Accounting. Her story is a great reminder how teaching your kids simple financial tasks can go a long way to making them more responsible with money.
Check out Maybel’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win our $500 personal finance scholarship, announced August 31st!
Looking for more ideas on teaching you kids about money? Check out this huge roundup post of 36 expert ideas on teaching kids money saving tips.
Learning the Importance of Saving from My Parents
My parents have always been financially responsible. From an early age, my parents tried to teach my siblings and I the importance of saving by opening youth savings accounts for us. We each had piggy banks and regularly my parents would drive us to the bank to deposit the pennies and dollars we had collected from birthdays, holidays and any loose change we could find lying around.
We were each in charge of filling out our own deposit slip, with their help of course, and sitting with the teller as they processed our transaction. I remember being excited when the teller would stamp my savings account register and I would see my new balance grow.
Looking back I see how important it was to have us kids involved with the physical process of depositing our money, versus my parents doing it themselves, which would have been a lot faster and easier for them. Even though I was kindergarten age, my parents believed it was never too early to teach the value of saving. They also stressed how important it was to remember that little by little, it all adds up.
My Parents Didn’t Give Up Teaching Me about Money
As I grew into my teenage years and began working, I wasn’t as good at saving as my parents would have liked. I was now earning my own money and could “buy anything I wanted.” Saving wasn’t something I felt was that important; I felt I had time to save later.
That didn’t stop my parents from advising me on my finances. They felt I spent my money on frivolous things and now having access to credit, they warned me about spending more than I was making or could pay. I can hear them now lecturing me on horrible I had become at managing my money. Luckily the phase didn’t last long.
Maybel’s parents helped her dodge a bullet by teaching her about credit and overspending. A lot of people get access to credit and get in way over their head, not realizing how much interest on loans really costs.
I was most definitely caught up initially with my “financial freedom” but that didn’t mean I didn’t have bills I had to pay. My parents ensured that I helped contribute towards my car payment once I had a steady job. I would write a check to them each month to help cover the cost of the monthly payment. I was also responsible for paying my car registration each year and my gas. My mom would give me the registration bill when it came in and I would write a check directly to the DMV.
I didn’t think much of these tasks at the time, but having worked in accounting for a couple of years now, I see now how many people have never been taught to balance a checkbook or write a check. A task I took for granted turned out to be an invaluable lesson taught to me by my parents, because I certainly didn’t learn any of these basic necessities in high school or college.
I owe everything I know about personal finance to my parents. From saving money to paying bills and budgeting, my parents did me a great service by teaching me all of these from a young age. As an adult, with a family of my own, I plan to do the same with my children. My parents’ financial guidance molded me into an adult who, despite my teenage years, is financially responsible and realizes the importance of saving and investing.
Questions about budgeting and how to save money are some of the most frequent we get here on the blog. I reached out to ten money experts to answer the top 10 budgeting and saving money questions.
I am proud to have been able to buy a home, an investment I can later pass on to my children. Because of my parents, I see my son and know it’s not too early to start saving for college or to teach him the basics of savings, like they did with me. I am forever grateful to my parents for all they have taught me and continue to do so.
I want to thank Maybel for her essay on how her parents taught her the importance of saving through simple financial tasks…and a little nagging. Financial responsibility and daily money tasks aren’t on the curriculum anymore in schools so parents have to take it upon themselves. This essay really proved that parents can teach their kids the importance of saving in a meaningful and disciplined way, one that grows as the child grows. Be sure to support Maybel by sharing the article through social media and check in August for the winner of the personal finance scholarship.
Read the Entire Money Lessons from Parents Series
- 3 Money Lessons My Parents Taught Me Growing Up
- How Do Parents Teach about Money When They Weren’t Taught
- 3 Simple Money Steps My Parents Taught Me
- How My Parents Taught Me Good Money Habits
- 36 Expert Ideas on Teaching Kids Money Saving Tips