How To Ensure Your Children Are Financially Literate: Part 3

Having looked at 

Principle 1. Accounting for your allowance 

Principle 2. To get money you need to earn it.

Let us look at the third principle

3. The principle of Saving

It is good to keep money for a rainy day or to buy something that we really want. A good principle is to save at least 10% of your income. (If you can save more than 10% the better). 

The idea is to be consistent.

Every Little Helps

For every income that is received a portion should be placed in the savings.The money saved should not be used to buy stuff just for mere gratification. 

As much as the money in the saving is separate from that which is used every day the child needs to also be accountable. 

They need to keep a log of

*how much they have saved.

*any drawings that have been done on the savings account 

The Coins Add Up For Kids Treats

Example 

If your child wants an item that costs say 1000,  they could save 200 - five times or 100- ten times. 

The point in this case would be to know the target amount and how long it will take to get there.

You will be surprised the number of creative ways the child will come up with to get to the target amount faster.

Just ensure that the child understands what the point of saving is.

How To Ensure Your Children Are Financially Literate Part 1

Simple Explanation Of Debt Ceiling

Why It Pays To Invest In Gold

Damaris Musinguzi is the Author of 10 things your children should learn about money. She also runs an online business  Utensils r us which is one of the first in Kenya.