I've been reading an interesting article about saving for retirement. Funny that someone should start thinking about saving for retirement before they even start working! Anyway, the author of the article says that if parents teach children the importance of saving when they are still very young, they'll know the value of money and once they start working, they'll not waste any money on stuff they don't need. That would enable someone who saves like $4K a year to retire with a good sum of $1M when they're 65. The question though is, wouldn't teaching children to save young make them misers? They'll think money is so valuable that all you need to do is keep it in the account and get by with only as much as you need to barely survive? Your thoughts?
I think it depends on the kid and if he was spoiled, because my parents never really instilled in my mind that I should save, they gave me money if it was mandatory, but they really couldn't or don't want to buy me the "in" and expensive toys that time like the the Play Station, Game Boy, roller blades, etc. so I grew up thinking that if I want something, I should save up for it, so here I am now. Everything that I want, I have saved up for. So I guess the way that children were raised shapes their personalities and decisions, and it's not really by lecturing them to save.
I agree it depends on the kid. But as for me, it went well. I mean my parents didn't teach how to save per se' but they did thought me the value of money early on. Even though we were pretty rich and we can afford a lot of fancy things my parents didn't spoil us, whenever we go the mall or go out somewhere they would always tell us "We don't have enough money in our pockets right now so don't point at things"
I think it's an important lesson but it solely can't provide for ensuring that the child will grow up to be smart with managing money. I think being smart with resources is a culmination of all things that a person experiences and merely teaching him or her something isn't always effective. It's much better to just lead by example so that it comes more naturally to them when the time comes.
My mother raised me with a very simple system for how to save money- 10% of the total goes to charity, 50% goes to savings, and 40% goes to spending. I never even had much money of my own to save or spend, but because I heard this mantra over and over and over as a kid, it's become total second nature today. I'm the only person I know who actually has any savings. Granted, things are a bit more complicated in adult-land, but the general principal still applies and I do surprisingly well with it.
I think it really helps. When you plant the notion of saving money on a child early on that idea will stick to his/her mind and at some point in his/her adult life he/she would really incorporate those ideas in her own life which goes back to the point that a great child is the result of great parenting.
But can't it also work against the purpose? Make the child idolize money when they are grown up? I know someone who grew up poor and when he managed to start making money, he still got stuck in poverty. The guy couldn't spend money for fear of slipping back to the place he'd emerged from. It's better for parents to teach their kids to strike a balance between saving just for the sake of it, and saving for a purpose. They should teach their kids to spend money [wisely]. That should work better so that if you save some cash saved, it's because you looked out for deals, bargained, etc rather than do without something because you want money in your account.
Saving is definitely a skill that has to be learned. Starting at a young age is a good idea so kids can get into the habit of thinking in that way. I don't think it should be a requirement for kids, but more like a recommendation. If parents take the time to teach their kids the techniques of saving, the kids have to tools to either use or not use as they choose. I wouldn't want my children to think they have to save everything and can't enjoy anything now, but I also would want them to be prepared to make wise choices with their money when they get their first job.
