How To Help Your Kids Save For A Home

We all know Vancouver houses seem unattainable, especially for the younger generation. But if we teach kids the value of money, and how to save at an early age, they will be able to afford a good home when they are older. In school, kids aren’t taught the importance of saving, and many find out the hard way when they get in trouble with credit card debt.

 

Money Management

One of the most important things is to start talking to your kids early about money so they have a positive relationship with it. Money shouldn’t be a scary or taboo subject. Studies have shown that parents are more likely to talk to children about sex than about money. You should be open and honest with your children when it comes to money. Do not hide how much you earn or what debts you have.

Open Up A Bank Account

To help your children save, you should open up a savings account for them and teach them how to deposit money. Make sure they understand the math and how interest works. If you can provide a great source of motivation for your kids to see how their money will grow over time, they will be less likely to withdraw it and spend it on something frivolous.

 

Teach Them Budgeting

Start teaching your kids budgeting skills by giving them a set allowance on the same day each week. This will install disciplined habits. Once they are old enough, encourage them to keep track of everything they spend so they know exactly where their money goes. There will definitely be some learnings when they over spend on certain weeks. Don’t be tempted to give them more money unless they work for it. When they get older, you can give them a loan that must be paid back in instalments and by an agreed upon date. By formalizing these loans, it can reinforce financial learnings and prepare them for when they buy a home. If there are no consequences, there probably isn’t any financial education, which could be a real concern when they get older.

 

Create A Timeline

As a kid, the concept of compound interest can be hard to grasp, yet it’s the most important lesson a kid can learn. The magic of compound interest is basically earning interest on interest, compounding your money over time. With compound interest, the earlier you start saving, the more money your kids will have in the long run and the more likelihood they’ll be able to afford a home.

Lead By Example

Children learn by their parents so the best way to teach them about saving money is to save money yourself. Have your own savings account that you put funds into regularly. Show your kids what you’re doing with your money. When you’re out shopping, teach your children how to get the best price and explain why buying one item over another makes more financial sense.

 

Conclusion

Teaching kids the value of money is never an easy task. They don’t think about the future further than their next meal or what they are doing after school. Owning a home probably isn’t much of a priority. But if you create excitement around investing and money, you can help them save. By using these tips, you can set your kids up for the future and in good position to buy a home one day.

If you’re thinking about buying or selling a home give me a call