Sometimes dreams come true… And sometimes family savings are the way to realize them.
Fulfilling a dream, working together with all family members, will give you as a family the opportunity to enjoy the result together and will help you equip your children with significant tools to achieve financial goals.
Children’s most meaningful learning is through imitation, with parents setting the most important example for them. Show children how you save for the family dream, how you save surplus for the cause, and what you give up so you can save the money. The child will learn from your example, just as he learns from you any other life skill.
Who among us does not remember the first thing he saved and the feeling of satisfaction he felt when he achieved it? A positive saving experience is important, and just as important is the way. The more enjoyable the road, the greater the chance of achieving the goal. Rejoice with your children as they progress toward the goal and note the progress and small achievements along the way. You can even incorporate small rewards as you progress towards completing your savings.
Have you reached your destination? Celebrate together with the child the fulfillment of the goal.
How do you plan shared family savings?
- Dreamingbig and setting a savings goal – dreams motivate savings. Dreams can be big: a bar/bat mitzvah, a trip or family vacation, a new room for the child, or more modest: a new TV, a family weekend or the purchase of an item that will make the whole family happy. Give the dream a name and detail it as much as possible: saving for a bar mitzvah trip, or a visit to an amusement park for the whole family. When the goal is there, both the amount of savings and the chance of realizing the plan increase. Define the amount needed to realize the dream and when you want to realize it, discuss what needs to be done in order to reach the goal: how much money should be saved for the dream each month, what as a family you will give up together and in what ways each family member intends to save for the dream.
- Adapt the nature of savings to the children’s ages – when small children are in a family, the savings should be focused on a short-term and simple goal to achieve. Small children will not be able to wait for a long time for their dream to come true. With older children you can set big and long-term dreams and you can even save with them for several goals, one short term and one long term. Discuss with your child the differences, what money goes into which savings and how long it will take to save for each of the goals.
- Start saving small – learning the principles of saving for a goal can begin with the fulfillment of a small dream that is achieved in a very short term. The initial sense of success will help realize bigger dreams through long-term savings.
- Managing savings jointly – finding the right way to manage the savings will improve the chances of completing it: some will choose to allocate the small and surplus money they receive for savings, some will decide to save all the gifts they receive, some will write in a family WhatsApp group about what they gave up today for saving (for example, giving up a popsicle at the grocery store). The ways to save are varied, and even saving NIS 10 a week for each family member will amount to a considerable amount after a period of time.
- Keep track of savings progress with your children – periodically tracking the money you’ve managed to save will encourage you all to keep saving. You’ll soon see the amount add up. You can “color” the amount you’ve saved in the spirit of the dream, “Now we’re done saving for a wheel for a bike or a plane ticket.” If your child is young, you can paste a picture of the savings goal in a central place and indicate progress on the picture by coloring parts of it.
- Giving up today on the way to future savings – discuss the issues of giving up with the children, we all sometimes buy because we just feel like it and not because of a real need. Explain to your child that delaying gratification brings us closer to our goal, and that spending money in a moment’s decision will take us further away from the goal.
- Give an incentive to the effort – offer a matching option in which any amount saved by the child will be doubled by you, so you can get ahead of the completion of the savings and end the project with a sense of success.
And what to do when your family savings plan goes wrong.
Saving money requires self-discipline. Don’t put much of the savings on the shoulders of the child, too much effort for him can end in failure. Tailor the effort to save for your child’s age and character.
Sometimes the best learning is born from mistakes. Was the child tempted and spent money intended for savings on an immediate purchase? Let him make a mistake and let him understand the outcome of the act. Explain how the spontaneous purchase delays the fulfillment of the dream you defined as important.
Have you started saving together and the project is not flowing, the child is more focused on the “now” and less on future savings and also says that he is fed up? Observe with him the amount you have already saved and have a discussion with your child about the effort of saving. We examined with him the feasibility of increasing the pace of savings in order to reach the target earlier, and if there is a burning desire, it may be possible to designate part of the amount already saved for another important goal and postpone the target date for saving accordingly. Talk to them about their priorities and set new ones if the previous ones have changed.
