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Now that a new school year has just begun, it can be a great opportunity for you to introduce or remind your kids how to budget their baon. By doing so, you are training them to spend their allowance wisely, a valuable habit which they can bring with them all the way to adulthood.
As early as kindergarten, you can familiarize your kids with tips on saving and spending. Here are fun budgeting lessons that you can try practicing with them:
1. Start with a piggy bank.
This is the easiest way for you to teach your kids the importance of saving by doing something as easy as putting coins in their personal ‘banks’. Tell them that the goal is to fill it up until it’s full. Educate them to save money for the future and that the more they save, the more their money will grow, which also means the more they can afford their dream items.
2. Share the ‘money jars’ lesson.
Kids will always love toys. When your child asks for more toys, try telling him/her to buy them with his/her own hard-earned money. It won’t take a long time for your kid to realize that he/she must work hard in order to get what he/she wants.
One way to help your kid with his/her goal of saving is the Money Jars Lesson. Set up three money jars for your child: one for saving money, one for spending money, and one for sharing. The Saving Jar is for short-term savings, like the toy or food he could not yet afford with just a week’s allowance. The Spending Jar holds the money that your kid could spend however he/she wants. The Sharing Jar is the money that your child can use to donate to other family members or to other people and institutions such as church donations.
Each time your child gets his/her allowance, help him allocate a budget for each jar. It’s up to them how they want to split their allowance but don’t be afraid to set some guidelines. For example: 40% goes to savings, 40% goes to spending and the rest is for sharing. As it goes on, he/she will figure out that a P10.00 allowance that he/she has earned this week means he/she would have to do more work for a toy that costs P50.00.
It always helps to make this process as fun as possible. To encourage them to save up for short-term goals, put a picture or stickers of their desired toy or item on the jar. This is a visual reminder of what they’re working for.
3. Lead by example.
Kids will take inspiration from whatever you say or do. That’s how they learn by example. Get your own money jars where you can put your funds regularly. When you’re out doing grocery or shopping, or even when your shopping online, open the discussion on prioritizing what to buy and what not. You can also show your children how to distinguish which item is a better buy or not, just make sure to give them an understandable reason behind it.
4. Open a bank account.
Once the piggy bank or the Savings jar is full, take your kids with you to the bank and open up a Savings account. Let them count how much they have earned and make them take note of how much they will deposit. You can also reinforce the idea of interest. This can be a source of motivation for your kids to understand that the more they save over time, the more their money will grow as long as they don’t touch it.
Good thing BDO offers a Junior Savers Account specifically for children from 0-12 years old. Now you can open a savings account for your kid to help secure his/her future. Just visit your nearest BDO branch or go to www.bdo.com.ph/junior-savers for more details. INQUIRER.net Brandroom/FR/VT