What should you do when your child asks you for something very expensive? Some parents if they have the money just buy it. Are you one of them? Other parents may look for ways for their kids to earn the money and help them save for it. Which is the better way? There may not be a better way, but let's talk about some simple ways we can help those kids save for that first expensive item.
Saving is a lost art in our society because everything around us feeds into our need to have things faster and immediately. How do you react when your webpage takes 15 seconds to load instead of the usual 10? We have microwave dinners, high speed internet, we've increased the speed limit in some areas all because we have this need for things right now. No one wants to wait. Because no one wants to wait it even affects how we buy things. People are spending tomorrow's money today to get what they want now (by the way, that is what you do every time you use your credit card). We have found ways for our kids to earn money in the front door and we are letting it out the back door. How do we escape this trap and help our kids save for the things they want and not give into this culture? Here are three ideas:
1 - Teach them the value of money - There is an old expression which says a bird in the hand is worth two in the bush. Kids need to understand that what you as the parents I have earned today is mine, but there is no guarantee that I will continue to earn tomorrow. So don't mortgage tomorrow's money just for instant gratification today.
2 - Create a saving plan with a goal - Let's say your child is saving for a $500 bike and they earn $50 per week. Obviously if they saved everything they made for 10 weeks they could get the bike. Some kids may not want to or be able to save everything they make so create a plan that allows for some fun spending without forgetting the goal. Here is a simple way to do it. Allow them to spend 20% of what they make on whatever they want and let them save the rest. This allows them to satisfy that need for instant gratification but still lets them save towards their goal.
3 - Keep the money out of reach - Remember when your child was young and you didn't want them to get into the cookie jar. What did you do? You put it up high out of their reach. Now they could possibly climb up there and get the cookies but they had to consider is it worth the effort. Put your child's money in a place that is out of reach. A great place may be in a CD that lasts about the same time as they would need to save for the item they want to purchase. They could actually take the money out early but there is a penalty for doing it. This forces them to ask the question do I really want that cookie?
Parents, saving is a lost art but it doesn't have to be. Your child can learn to put money away to buy the things they want. So when your child asks for that next expensive item it is your duty to help them. Help them look at ways for kids to earn the money they need. Teach them the value of that money and finally help them save towards their goal. Not only will your child have a sense of accomplishment but you will to.
Nicole Clemow is an international author and speaker and together with her business partner Helene Kempe, they have written a ground breaking new book "Teach Your Kids the Value of Money". Check it out here at http://www.waysforkidstoearnmoney.org to get your free chapter on "Business Kids" and other bonuses.
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