Next week (May 10-16 ) marks Credit Union National Youth Savings Week and to celebrate, Castlebar Credit Union is reminding parents how important it is to teach children a healthy attitude to money and saving.
A Castlebar Credit Union spokesperson stated: “Given the harsh economic reality facing many Irish families today, there has never been a more important time to focus on providing financial education to our young people. A healthy attitude towards money is crucial to ensure that children don’t develop bad habits when it comes to money management. Studies have shown that the development of a savings habit at a young age results in that healthy attitude to money staying with the person through to adult life”.
The benefits of teaching children about money early on are both immediate and long term, the spokesperson added.
“In the short term, they may develop strong saving habits, learn how to make smart purchases and learn why they can't immediately get everything they want. In the long term, we can help them avoid getting into debt. By teaching the value of saving for the future, you can put them on the road to financial security”.
For further information please contact Castlebar Credit Union on 094-9022969 or just pop into us in the office at Market Square, Castlebar, Co.Mayo or contact us on our website www.castlebarcu.ie
Teach Children the Savings Habit
It’s not easy being a child today. The difference between wants and needs is rapidly disappearing, with children assuming they ‘must have’ the latest fad because a friend has it or they’ve seen it on TV.
At the same time, children have access to more money than previous generations. This may come from a variety of sources, be it pocket money, birthday gifts or other occasions. The benefits of teaching your children about money early on are both immediate and long term. In the short term, they may develop strong saving habits, learn how to make smart purchases and learn why they can't immediately get everything they want. In the long term, you can help them avoid getting into debt. And by teaching the value of saving for the future, you can put them on the road to financial security.
Learning the Value of Money
In a child’s world, money comes from Mum’s purse or Dad’s pocket. When this runs out, a machine magically spouts out money by tapping in a few numbers. Children need to understand that money is earned and that you can only spend what you earn.
Tips:
- Pocket money is a good way to help children learn to make their own decisions and live with them. How much to give will depend on age, maturity, responsibilities and the family’s financial situation.
- Give advice to children but let them make their own spending decisions and mistakes.
- Encourage children not to buy on impulse but to think about other options which they can spend their money on.
- Consider linking pocket money to chores. Pocket money must be earned, the same way Mum or Dad earn money by going to work.
- Encourage children to put a little aside each week to save up for something really special.
- Give the pocket money in small denominations to encourage children to put some aside as savings.
Developing a savings habit
Saving is a habit. It is learned by doing. If a child can develop a savings habit at a young age, it stays with them for life. Saving gives children a feeling of independence and a sense of responsibility. Having their own savings account helps children to learn how to manage their money. The key element is not how much they save but that they develop the habit of saving small amounts on a regular basis.
How to encourage Savings
- Consider rewarding children for regular saving (perhaps topping up savings ).
- Help children to identify short term goal to save towards.
- Make saving interesting. Develop a savings plan or calendar to show when and how the goal can be reached or help children to hang up a picture of what they’re saving for.
- Let children learn that they have to save up to buy something they really want. Don't let them get into the habit of running to you every time they need more money.
- Explain how dividends and interest work. When they put their money in a savings account, these savings earn more money at the end of the year.
- Give children a piggy bank to help them save or better still, bring them down to the local credit union to open a savings account.
CU at Your Place
Since their formation, credit unions have been encouraging children to save. Enquire at your local Castlebar Credit Union about opening a savings account for your child or joining the local school credit union. Let the savings habit begin!
