Teaching Tiny Savers: Top 5 Ways to Instill Money Wisdom in Kids.

"Money doesn't grow on trees." We've all heard it, probably from our own parents. But in an age of contactless payments and digital transactions, teaching our little ones about money has become a tad trickier. Gone are the days when they'd simply see coins dropping into a piggy bank. Now, it's about striking a balance between the tangible and the digital. But fear not, dear parents! Here's a breakdown of the top 6 ways to teach your children the value of money and the art of saving.

1. The Classic Piggy Bank – With a Twist.

Start with the age-old tradition of saving in a piggy bank. But let's add some flair. Get three clear money boxes and label them "Save," "Spend," and "Share." Whenever your child gets some money, divide it among the three jars. It’s a hands-on way for them to visualize saving for the future, spending wisely, and the importance of giving. We do this for Eid and birthdays, they get to keep a certain amount to spend right away on a new toy or something they really want, then, a certain amount goes into their savings and lastly, they can use a portion of the money to share. What do I mean by share? Well, it could be donating it to charity, it could be buying our helper a gift, it could be surprising a family member with a little something, this is their choice. I love these clear ones for this purpose, the children can visually see the money they put in each time and can see it building up which encourages more saving. For creating the Save, Spend and Share money boxes these clear money boxes are fantastic, or these wooden ones with a clear front are also very sturdy and the kids can paint / colour them in to personalize them however they like - bonus as that gives you 5 minutes of peace! We also always have the boys saving for the next family trip, this travel savings box is a great money box so they can see what they have saved for the next holiday and keeps them excited! *The above are links to Amazon products that we may earn a few dirhams on (from Amazon) when you purchase, this doesn’t affect you but does help us support the Real Mums community and overheads.

2. Turn Shopping into a Lesson.

Instead of speeding through your grocery list, involve your child in the process. Give them a set amount and a list of items to buy. As they make choices, they'll quickly learn the concept of budgeting. Do they go for the pricey cereal they love or a more affordable one so they can also grab their favorite snacks? It’s economics for kids, aisle by aisle. You can even get them more involved by asking them to create their own grocery list for the week, set a budget for it and ask them to estimate how much they think each item will be and estimate how much they think they will need (this may require a helping hand) but is a great way for them to predict and compare. Let them check out by themselves too to foster more independence and life skills.

3. Play Games that Teach Financial Literacy.

Board games like Monopoly or The Game of Life can be excellent tools. They'll learn about earning, spending, investing, and the unpredictability of financial events—all while having fun. If your child is more digitally inclined, there are plenty of apps and online games that teach money management.

4. Earn and Learn with Chores.

Assign certain chores around the house a monetary value. Now, don’t get me wrong, my kids are always expected to pull their weight and do basic chores to help out, but there are always extra chore options that I am happy to pay them for since they don’t get a monthly allowance yet. It instills in them the understanding that money is earned through work. Additionally, it can be a great way to teach prioritization: if they want that new toy or game sooner, they might opt to take on more tasks to earn it faster. This method not only helps kids appreciate the money they earn but also instills a work ethic, independence, life skills and the concept of delayed gratification.

5. Open a Real Bank Account.

This might sound a bit grown-up, but many banks offer accounts tailored for children. Under your guidance, they can deposit their savings and watch their account total grow. It introduces them to the world of banking, and there's a certain thrill in having their own bank statement! There are several banks that can open a minor account these days, it is worth noting that many in the UAE require the father’s signature and won’t let the mother do this so make sure to do your research (there have been lots of posts on this in our Facebook group Real Mums UAE which may be helpful to anyone looking into this option.)

6. Their own home mini shop.

If your children are anything like mine, then they will be constantly asking for everything they see in the shops, at their friends houses or online. They want it all but have no idea how much it all adds up to. These days I ask them to add it to their “wishlist” (a list made in one of their note books, along with the price. Then they have a list to go to choose from when it is Eid / Birthday etc and have some extra cash they want to spend. As well as this, you can buy a stock of some lower cost items, (for us, it is always lower cost Lego sets that I grab in the sales), then when they have enough money they can “buy” a toy / activity from our cupboard. They also ask for little jobs to do around the house when they know they only have a small amount of money left to earn which I rather like!

Remember, money lessons, when started early, set the foundation for a lifetime of wise financial choices. And remember, it's not just about saving pennies or making a quick buck. It's about understanding worth, making informed decisions, and recognizing the balance between needs and wants. So, here's to raising the next generation of savvy savers and smart spenders!