We are all great spenders – kids, parents and even seniors.
Our economy is based to a large extent on consumer spending, and the message to consume is endlessly spread by mass media. Saving? We know it’s important, but spending is so much more rewarding in a superficial sense.
Saving isn’t fun, especially when interest rates are as low as they are today. But it’s necessary and we need to do better at it as a country. Here are some thoughts for instilling a culture of saving in your family:
1. Say “we can’t afford it” every so often: Don’t make your kids feel guilty when they ask for something. Just explain matter-of-factly that because of bills and savings commitments, there just isn’t the money to buy a particular thing on a particular day.
2. Splurge strategically: Think of a savings dividend for your family – a fun way to spend a little of the money you’ve been putting away.
3. Have a family change jar: You’ll be shocked how fast the money piles up when everyone empties their pockets at the end of every day.
4. Practice responsible shopping: Demonstrate how you can save money by buying the things you need on sale, by using the odd coupon here and there and by shopping online instead of in-store.
5. Use the banking system as a teaching tool: Get kids their own savings account, with a bank card. When they earn money or receive gifts, show them how to deposit it. Monitor how the money is growing over time by checking the account online.
6. Don’t bludgeon your kids with a message of saving through sacrifice: You want them to think of saving as a tool, not a burden.
7. Contribute regularly to a registered education savings plan: It’s a great way to demonstrate a regular long-term savings commitment to your kids.
8. Insist your kids save: When they earn money or receive cash presents, have a talk about how much will be spent and how much will be saved. Some parents may also want to insist a portion be set aside for charitable giving.
9. Understand that saving is its own reward: Interest is great, but the real benefit of putting $1 away is having $1 available for future use.
10. And finally, be a role model: Save at least 10 per cent of your take-home pay, never carry a credit card balance and don’t use your line of credit as a supplemental income. Manage your money the way you hope your kids will.