Out of the many things I want to show my gratitude to my father, the most important one is – how to save money for future needs. Without his constant brainwash and persistent push, I wouldn’t have achieved my expensive goals. Another essential addition to my lessons on savings was – be economical, not a penny-pincher.
Every parent should instill the power of savings in the next generation. It is not only a good parenting skill but one massive reason your kids will remember you on a rainy day. Teaching this habit at a young age leaves a long-lasting impression. Kids start making economical choices now and secure their future by thoughtful spending and saving at the right time.
My father did not push me from day one; he first framed the necessity in my mind and then taught me the tools.
So, here I am with the same tricks that once my father used on me and made me the person I am.
1. Today is the day to start
I had one question for my father – “When should I start saving?”
He gave me a blunt and straightforward answer- “TODAY! Because there will never be the right day to start savings”. It is a fact that if you are unable to start building the habit of savings now, you will keep waiting forever. Start small. But start early!
2. Introduce pocket money and piggy bank
The first and foremost part of building the habit of creating a financial kitty is to have money. Without real money, kids can never get started and absorb the importance of savings. So, start giving them regular pocket money and set a monthly savings target.
Next step or the parallel step would be to gift them a fancy (make it appealing) piggy bank. Yes, parents need to spend on a pretty piggy bank and encourage kids to add their monthly saving in their personalized bank.
3. Make a record in a diary
A significant part of savings is keeping a record. Maintaining a diary is anyway a good habit, but documenting monthly or yearly savings is even better. Not only the practice brings transparency but also boosts a kid’s moral on seeing a large amount, written in front of their eyes.
4. Visualize the goal and think in reverse
Some of the treasured assets I possessed as a child were a bicycle, Tintin comics, and the brick game handheld console. As a kid, I remember begging and requesting my favorite possessions. There was a catch to win these assets – earn money and save it, to acquire the assets.
At times, I used to feel my parents were cruel by making me earn for my favorite things. But gradually, I figured their hidden strategy behind this cruelty. They taught me three incredible lessons through one game plan:
- One, visualize your goal and understand how much you need to save by thinking in the reverse direction.
- Second, prioritize your goals and assess which is the most immediate requirement of all.
- Third, when you purchase a treasured item from your savings, only then you can realize its value and maintain it well.
So, help your kid but let them save for a bicycle, a new gadget, latest toys, novels, comics and whatever else they wish for.
5. Read about the different ways to save
Time is of the essence after you start saving money as a bank account holder. The longer you keep the money in the bank, the better interest you incur. Isn’t it?
There are various ways to save money when you start earning. However, one cannot expect children to understand these investment terminologies so soon. But what kids can comprehend is that financial savings are divided into two parts;
- Short term savings tools and,
- Long-term saving tools.
Understanding these trivial concepts is enough to grasp the idea of mutual funds, fixed deposits, debentures, bonds, and much more in the future.
6. Maintain a bank account from teenage years
This one is my favorite because I remember my father scolding me for not showing interest to visit the bank.
Today I am glad; he made a bank account for me as a teenager. By the time I entered college, banking was a piece of cake for me while my peers were still struggling on understanding what savings account is and how we earn interest on the deposited amount.
7. Always be prepared for a rainy day
Importance of savings is not limited to purchasing expensive items and services but also prepares for an unanticipated emergency. Having a little surplus in hand gives an individual the confidence to face bad days, and a little extra money may even benefit a friend or family in dire need.
Imbibing the habit of saving money creates responsible children, especially with financial matters. In fact, by starting this habit early, you are blessing them with enough room for errors. Money can’t buy happiness, but it does help in acquiring food, shelter, and unpredictable medical help.
I am immensely grateful to my father for educating me on the importance of money. One of his dialogues which will always stay with me – Paisa bohut mushkil se aata hai, uski izzat karo (money is earned with sheer hard work, so respect it!)