Teach your kids the money-saving habit

From pocket money to shopping, here are ten ways to get your children off to a good start when it comes to saving cash.

You can get your kids off to an early start when it comes to the savings habit and it could be one of the most useful lessons you teach them.

Here are ten useful ways parents can help demonstrate the importance of making the most of your cash:

Monitor pocket money

One of the most common and best ways to teach your kids the art of saving from the toddler stage is to give them regular pocket money. But you must ensure they slot some of this aside in an old-fashioned piggy bank, or get them to design their own miniature 'bank' made from a small box. They can slot their pennies away and as it gets heavier this will be a prompt to put even more in there to build up the sum. 

Give them a goal

Adrian Lowcock from independent financial advisers Bestinvest told MSN Money that parents should "set a goal for the money".

"This might be something they want to do or buy that is especially important to them such as a particular toy," he said. You could even encourage them by matching their contributions to their piggy bank, whether in the form of pocket money or cash gifts received for birthday or Christmas.

"When they buy what they have saved up for they will appreciate it even more and you will have instilled into them the lesson that saving can lead to great rewards," Lowcock says.

Get them to help with the supermarket shop

Shopping is another great opportunity to introduce the concept of saving. You can start off by putting together a shopping list and, with your kids, consider the cost of the items. This way, you can let them know what tends to be more expensive (steak, for example!) and that own brand goods tend to be cheaper. Add any vouchers that will take money off your purchases, take along your loyalty card, and you're set for a practical outing that will provide a useful money lesson.

Tips on how to save on your shopping

Show them how to search for a bargain

Explaining the value of comparison shopping, whether online or in shops, is another useful tactic. Also encourage them to wait for sales. Essentially, this boils down to encouraging your kids to search for bargains. You could make them wait for the sales for something they really want to enforce the point, says Andrew Swallow from IFA Swallow Financial Planning.

"This was the best saving tip for my kids as while many a time they might've wanted the latest game or CD, we would make them wait for this - it was hell for us but it did teach them good money habits," he said

Show them how to save on household bills

Rising energy costs are seeing household bills soar. Stressing the importance of switching off lights, and saving energy in whatever manner possible is not only aiding the environment, but also saving money. Tell them to turn off the tap when brushing their teeth, for instance, and explain the benefits of energy-saving lightbulbs. But whether they are five or 15, the key is to teach them the value of money in terms that they will understand, stresses Jason Witcombe from IFA Evolve Financial Planning.

"This means pointing out areas where you feel they are wasting money. So, if they are leaving the tap or heating on, explain that what they have just wasted could have bought some Ben Ten stickers or a Peppa Pig magazine," he says.

Ways to save on your household bills

Let them know the importance of finishing your food

Leftover food is money down the drain. We all remember our mothers telling us to eat our greens, but not only is this beneficial to your health, it also take the pressure off your wallet later in life. So tell your kids to eat all their dinner despite their protests! This way you can also encourage them to cut out sweets and snacks, and stick to healthier alternatives as they won't be hungry between meals. 

Pay them for doing (some) household chores

Try to determine certain tasks around the house that your kids can do and that you will pay them for. This could be anything from washing the car to cleaning the bathroom. The point is not that they will have to be paid to do their bit around the house, but that money doesn't come for free and that they will have to work for it. 

Lead by example

Children acquire a lot of their parents' habits, which will influence the kind of lifestyle they lead when they grow up. Develop your own money-saving routines that your kids will notice. This might include, say, filling up your fridge with supermarket own brands, and cutting out life's luxuries yourself from time to time. 

This could also extend to taking your kids to open their own savings account with a high street bank or building society when you go yourself, adds Jason Butler from IFA Bloomsbury Financial Planning. "The physical act gives them ownership and makes the savings issue real," he said.

Use free local amenities

Take your kids to your local library before you purchase the expensive books they need for school. Regardless of availability, it's a great habit to check before you spend hundreds of pounds on books that they might only need for one term. And be sure to make use of any of other free facilities around your area that are useful and fun - from museums and parks to free days out.

Get creative - and make it fun!

Rather than buying expensive greeting cards, encourage your kids to cultivate their creative skills. This is a hobby they can take into adulthood, and will save them stacks of cash on birthday cards and even presents if they decide to stretch to painting or knitting (especially useful if it helps them make presents for loved ones).

You could also use games to impart money-saving skills. Play monopoly with your children, suggests Jason Butler: "It is the best way to teach them the importance of saving, investing and buying assets."