Many people do all sorts of things to be rich and also believe the more money they have the better their lives will be. Interestingly, money is not a guarantee for a better or easier life. When you have more money the tendency for you to have higher responsibilities is there. The saying “to whom much is given, much is expected” is in agreement here. Also note that by the time you have a lot of money you will tend to see the futility in chasing only money in life. Life is about fulfilling God’s purpose for your life which has nothing to do with your comfort.

What then guarantees a better financial future?

It is financial literacy and discipline. This can be developed when you instill early personal financial behavior patterns in your child. An 8 year old who saves is being empowered and is already learning personal financial behavior early enough to make the right decisions later in life. Your child might not be able to save towards things that make sense to you such as his or her schooling, but saving to buy a video game or a toy will help build a great sense of independence in handling money. It is also a great time to help your child develop the discipline of not spending all, thereby saving for the future and also supporting a cause or charity meaningful to him or her.

How can children save money? Is it better to piggy bank or a bank account?

Physical currency is a wonderful and very real way to teach younger children about money. The fact that they can see it makes the lessons more at home. You can begin to use multiple “piggy banks” to physically teach them that saving is for different goals.

Physical currency, however, does not teach anything about earning interest on money. As your child grows older the need to teach returns on investments becomes very important. Money in a savings account, fixed deposit or any other investment will yield some returns known as interest or dividend. A way out is to give out weekly allowances in physical currency. Then when your child is old enough, from 8 years, you can take the “investment” portion of their savings and move it into other things, starting with a savings account. This will give them the opportunity to learn how to make their money work for them. This is what investors do. Also use this opportunity to explain to them the concept of working for money and also making their money to work for them.

Have you been teaching your child to save? Let’s hear your experience so far.

– Gbonjubola Sanni