The 5 most important saving lessons to teach your kids

Kids have less restraint than adults. When money falls into their hands, their first impulse may be to rush to the shop to buy something. Reckless spending can easily become a behaviour that is difficult to change later in life.

That’s why it’s so important to instil good money habits in kids from a young age.

Here are five important saving lessons to teach your kids.

1. There’s a link between budgeting and saving

The first step toward better financial management is to follow a budget. The earlier kids learn what a budget is and how to use it to save, the better.

If your kids receive pocket money in cash, let them divide the money into different spending categories and deposit some of it into their piggy bank. As they become older you could take them through your household budget, explain how you allocate money and tell them how much of it you put into a savings account. 

2. Saving small amounts is better than nothing

When times are tough financially, it can be hard to save. But putting aside some savings, no matter how meagre, is better than nothing. Those nominal amounts add up and can help pay down debt, freeing up more money to save.  

Making the sacrifice to save, even if it’s only a small amount, is an important lesson for kids to learn. Set up a savings jar and add loose change to it every week. Your child will be able to see how those small amounts eventually grow into a sizeable sum.

3. Setting savings goals can be a great incentive

When you’re saving for something specific, it becomes easier to maintain your discipline. Are there things your child wants, like cool clothes or the latest toy? Sit down with them and help them create a saving plan so they can eventually buy those items themselves.

A digital money app for kids, like FLX, makes it easy to create savings goals they can track. Once they hit a target and can buy the item they desire, it can give them enormous satisfaction. It also teaches them how rewarding delayed gratification can be.

4. Investing can bring bigger rewards

Understanding the difference between saving and investing can make a big difference to your kids’ financial future.

The principle of compound interest and how it builds wealth seems like a complicated topic for a child, but you may be surprised at how quickly they grasp the concept. According to a report by Finder, 270,000 Australian kids are already trading in the stock market. Imagine how quickly they could reach financial freedom compared to kids who start investing later in life.

5. Planning for an emergency can be a lifesaver

‘Be prepared’ is the well-known Scouts' motto that should apply to our financial life as well. Life inevitably throws the occasional curveball. It can be stressful if you’re not financially prepared for an emergency.  

Impress upon your kids the importance of having an emergency fund and how it can help them through an unexpected crisis.

To help your kids learn to manage money, join FLX here. FLX is linked to your Flexischools account, so you can track how much your kids are spending vs. saving.

This is general advice. Read the PDSs & TMDs at before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.


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