“Do not save what is left after spending; instead spend what is left after saving.”
― Warren Buffett
It is said that well begun is half done, the same is the case with educating children on the importance of savings. With ‘n’ number of brands competing with each other to acquire more customers daily, we need to save for our future while maintaining our standard of living. As childhood is an age where one can easily be influenced by advertisements and other forms of marketing, we must educate the children on savings and inculcate saving habits in them from a very young age.
Let us now look at why we need to educate children on the importance of savings.
i. It makes them aware of financial security: Educating children on the importance of saving at a very young age makes them aware of financial security and learn saving habits. This awareness will help in ensuring that they have sufficient cash in hand throughout. The future is always uncertain and having enough savings will help you meet the ends even during the most difficult of times.
ii. It gives them options to generate additional income, by starting additional ventures apart from their regular profession: Gone are the days when people were in the habit of sticking to just one profession. As opportunities rose across various domains, people also started engaging in part-time jobs or a venture of their own to generate additional income. Having read this, the very first question that arises in our mind would be: Where do they get adequate funds to invest in a new venture? This is where savings come into the picture. Money saved over a while can be used as the capital for starting additional ventures (upon reaching a certain age) and educating children on these uses of savings is the best way to give it a perfect start.
iii. It serves as a source to meet short and long-term goals: All of us have goals that vary from short-term to long-term. Making savings a habit can help us save money to meet our goals irrespective of the type of goal.
How can we instill saving habits among children?
•Storytelling: Storytelling is one of the most effective methods to convey important messages to children. Tell them moral stories that convey messages on the importance and advantages of having saving habits, (if possible with the help of illustrations). This will help them understand the concepts better.
•Involve children in day-to-day activities: Storytelling methods will have a better impact when children can relate them to real-life situations. Taking children for monthly purchases, involving them in calculating monthly expenses will help the children pick- up these habits and put them into practice as all these will help them get an idea of how money is allocated for various needs.
•Set targets and timelines: Set timelines and assign children targets to achieve targets within that time. Provide them incentives upon achieving those targets. This will serve as a motivation for them to reinforce positive behavior (saving habits in this case).
•Encourage children above the age of 18 to take up part-time jobs: Who wouldn’t love to start earning at an early age? Encouraging kids to take up part-time jobs will slowly help them get a feel of how it is to be at work and learn to live within one’s limits.
Savings play an integral role in our lives and children must understand this. As parents, we must identify the right methods to guide children to help them start saving at a young age.
”The beginnings of all things are small.” – Cicero.
So let’s start taking baby-steps to ensure that our children grow up understanding the importance of savings in our lives.
Idea & Concept: Anukrishnan T S, Research Analyst / Faculty
Content Development: Aswathi Satish, Niyog Consultancy Services Pvt. Ltd.