To most people, it appears that kids today do not understand the value of earning and spending money. They may not be taught that  investing is necessary even if they are still students. As parents, you play a crucial role in teaching your children the value of saving over spending.

Now more than ever children should be able to understand the concept of money and investment.  We live in an era where parents want to give their kids the best of everything. The best toys, the best clothes, the best mobile phones and technology,  the best… and what message is that sending to them?

Years ago, children had to work and save to buy “designer” clothes, high-end toys and so on. If we wanted them, we were taught to work for them. Today many parents simply give their children whatever they want. And when they don’t, kids retaliate with tantrums, disobedience and more.  Think about your own situation as a parent. Are you giving your kids everything they want? Giving in to their demands?  Maybe its time to stop and look at what you are teaching them.  Its okay.  You can stop.  Start by teaching them how to save money.  Here are some tips to get started:

1. Your children should be educated of the meaning of money. Once your children have learned how to count, that is the perfect time for you teach them the real meaning of money. You should be consistent and explain to them in simple ways, so they understand.  Repeat often. Every chance you get. When you go to the grocery store have them count the money and hand it to the cashier. There are many opportunities for children to “handle” money and understand what it is to hand it over to someone in exchange for goods and services.

2. Explain the value of saving money. Make them understand it’s importance and how it will impact their life. It is important that you answer their questions in a way they understand and can apply.

3. When giving them their allowances, encourage them to save a portion of it. Instead of giving a ten dollar bill, give them ten one dollar bills and use that as a teaching moment. Take them to the bank. Have them make a deposit. In person. Encourage them to keep a certain bill for the future. Motivate them by telling them that the money can be saved for something they want to buy that you would not buy for them otherwise.  And mean it.

4. Teach them to work for money. Start in your own home. Give them incentives. Have them do chores around the house beyond cleaning their room. Pay them for it.  This concept of earning a little money will make them think that money is something they have worked for and should be spent wisely.

5. Show them how to save.  Use a piggy bank.  When you open a bank account for them and let them deposit money from their allowance, show them their balance.  Let them count the money in their piggy bank. Showing them how much they have earned will keep them motivated to save.

Money and saving cannot be taught in one sitting. It takes time, patience and planning.  Use every opportunity to find teachable moments, just as you do with other aspects of parenting. They will catch on.  And learn. And if you are lucky, you will raise a child who truly knows the value of the dollar and what it can do, especially when it is compounded over time.