It's not all about the money : Teaching your kids how to save

Teaching your children good money habits should be something you do all year round, but the Christmas season - when money comes blowing into our kids' pockets from generous ninongs and ninangs, lolos and lolas and aunts and uncles - presents a unique opportunity to do so.

There is no better time to start your kids off on the road to financial responsibility than the holiday season. But it's not enough to teach them how to save. It's equally important to teach your youngsters how to spend their money wisely.

Why? Because there are few things more satisfying in life than having your own money and then buying something you really want with it.

But where do you start, and how do you communicate the value of saving to your child? How do you prevent your child from running off to the nearest mall with his Christmas money and blowing it all on more toys, books, and clothes when he already has enough of those to last him ten lifetimes?

First, it might be a good idea to allow your child to spend some of his Christmas money. After all, it is his money, and this is the holiday season, this is the time to make allowances for behavior that might be deemed unreasonable at any other time of the year. But do set limits on how much he is allowed to spend, or how many items he can buy. There is a difference between buying one item and going on a shopping rampage, especially during the holidays. Why would a child need to buy more things, when he has received so much already?

In the hands of a child, money can be a dangerous thing, especially if the child has not been trained properly on how to handle his finances. As the Bible puts it, "Train up a child in the way he should go, and when he is older, he will not depart from it."

In other words, start your children on the habit of saving early. Neale Godfrey, author of Money Doesn't Grow on Trees (A Parent's Guide To Raising Financially Responsible Children) says that teaching children how to save money is the same as teaching them any other habit, like brushing their teeth or doing their homework.

But don't hold a stick over their heads and threaten to beat them just to get them to save. From experience, we parents know that kids of any age do not respond well to force or intimidation. The more you push, the more resistant they become. Instead, try offering constant encouragement and praise. Make them want to save money, and you may be surprised at how they take to the idea.

It may sound strange, but teaching kids how to brush their teeth and teaching them to save actually have a lot in common. When teaching the child to brush you provide him with the tools (a toothbrush and toothpaste), then you provide the proper environment (a ballroom with a sink and a glass of water) to practice the discipline, and finally, you monitor the activity and offer encouragement and praise for successfully completing the task.

Teaching your kids the value of saving is no different. You must provide the child with the tools (in this case, money), the environment (an alkansiya, piggy bank or savings account), then you monitor how your child is doing and praise him or her accordingly.

Also, remember to make the environment age appropriate. Younger child may not be prepared to grasp the idea of an Automated Teller Machine (ATM) savings account. When my son, was much younger, he would watch me put the card into the sound soon get, money would come out. Thus whenever we were in the mall and there was something he wanted to buy - like a new book or toy - he would look for the nearest ATM machine, drag me there, point at it with his fat little fingers and say, "Mommy put your plastic money into the machine, so we can get some real money and go shopping." His young mind could not understand that for money to come out, I had to put some in first. He didn't realize that there was a connection between the two.

With younger children, a piggy bank or an alkansiya might be more suitable. Mina, 33, and a mother of two, bought her daughter Nicole, a prep student, a piggy bank. She suggested that Nicole give it a name and taught her how to take care of it like she would a real live pet by feeding it with coins every day. The bigger the amount of the coin, the more busog the pet was, and the happier it became. Nicole soom came to see the whole process as a task that she had to take seriously, or her pet would die.

For those who are a little older, like grade-schoolers, a passbook savings account where they can see their money growing by readint the number in the passbook. They will get a thrill when they see their name printed on the inside of the front cover. It will also be fun for them to see the passbook stamped everytime they make a deposit. For many kids, says Godfrey, even age four or five is not too young to understand about savings account.

The most important thing to remember is that you are your child's best teacher when it comes to the importance of saving. Your child forms his attitudes toward money by observing your own relationship with it. As Godfrey puts it in his book, "A parent unconsciously imparts knowledge simply because he or she and the spouse are the child's principal role models. Your youngster watches what you do very carefully. The kid studies your moves and your actions as well as your language, and then mimics much of your behaviour, even the way you spend money.