Viva Kids World Mommy, What Does Saving Mean?
Helping kids become financially savvy is a big job for parents: What about pocket money? How can I teach my child to save? And why is it so important to teach kids to manage their money responsibly?
A vacation here, dinner at a restaurant there – do you know how to save?
It's not so easy these days. Little temptations and "must haves" are everywhere. So if we have trouble saving, how are we going to teach our children?
There's no shortage of things to buy, and kids can easily feel like they need it all. However, many don't understand what it takes to afford these items. My own children are just six and eight years old, but they should already be starting to gain an awareness of the value of money and what saving is. Debt among young people is an important topic, as the Credit Suisse Youth Barometer also shows, so financial education provided at an early age can act as a preventive measure.
Florence Schnydrig Moser, Head Products & Investment Services, Credit Suisse (Switzerland) Ltd.
Urs Abt, who is a psychologist, family therapist, and creator of the "youth allowance," agrees with this assessment: "A lack of confidence in handling money poses a major risk that children and youths won't be able to allocate their finances properly later on and (...) before they know it, they can wind up in debt; from there, they may be less involved in their social and cultural environment due to a lack of money, and be left out." The first step: Learn to save!
It is important for parents to serve as good role models and to speak honestly about money – where it comes from and how to manage it, as Urs Abt explains in our interview «You Can Learn to Save».
You can also read about how children develop and what skills they need to learn about saving.
Learning about Money Management: Very Important For
of parents in German-speaking Switzerland
of parents in the French-speaking part
of parents in Italian-speaking Switzerland
Source: Credit Suisse Swiss Pocket Money Study
Pocket Money Exercise
Having their own pocket money is an important exercise for kids to gain initial experience with saving and handling money by themselves. “It's normal to make mistakes. This is all new to children – parents should talk about it with them regularly and help with questions and even disappointments," says Daniel Betschart from Pro Juventute.
What else should parents keep in mind about pocket money? Read our article «Pocket Money: How Switzerland Ticks». Tips from our partner, Pro Juventute, and the five most important insights from our pocket money study are summarized here.
Saving Is Easier with Realistic Goals
So how can we help kids set realistic, useful saving goals? And why is it so important to pursue a saving goal? In the column «How Saving Goals Help» Daniel Betschart from Pro Juventute offers some interesting tips on the matter. As he says: "It's important for kids to realize that not all wishes can be met, and even realistic wishes have to be placed on the backburner sometimes."