Teach Your Children to Save Money With These Expert Tips

Key Takeaways

• Learning to save money is a key financial skill that children can carry with them into adulthood.
• Some children can start learning how to save money as early as age three.
• You can motivate your child to save money by having them identify a specific financial goal.
• Use visual aids to track your child’s savings and be sure to celebrate when they make progress.

Are you looking for ways to teach your children about money? One of the most important lessons you can teach them is how to save. When you help your children develop a habit of saving money, they can go into adulthood better prepared to cover unexpected expenses and they’ll be less likely to go into debt.

Sure, you can simply give your child a piggy bank and hope they feel motivated to fill it up! But you can also help them become lifelong savers by showing them how to set and stick to a savings goal. You can even get the whole family involved by tracking your child’s savings balance and celebrating their progress together. Here are our expert tips for teaching your child to save money.

1. Have your child set a small savings goal

Does your child have their eye on a new toy or a trendy clothing item? You can motivate your child to start saving money by helping them pinpoint a specific item they want to save for.

Once they know what their goal is, you can help them make it feel more achievable by doing any or all of the following activities together (as appropriate for their age):

• Research: Look up the cost of the purchase and compare prices from different stores or retail sites.
• Calculate: Estimate how long it will take them to reach their goal. To do this, divide the total cost of the purchase by the amount of money your child can save each week or month.
• Schedule: Add savings targets to your family calendar or your child’s schedule. For example, you might note that your child plans to have $40 saved by the end of the month.
• Envision: Make a drawing or a collage of the coveted item so they have a visual reminder of what they’re working toward. 
• Celebrate: Decide how you’ll celebrate when your child reaches a savings milestone. For example, you might reward them by giving them $1 for every $5 they save, or by taking them out for ice cream once they reach the halfway mark. 

By taking these steps, you don’t just tell your child to save money. You show them how.

2. Use financial tech tools made for kids

You can encourage your child to save money, but you don’t have to motivate them all on your own. There are plenty of apps and other tech tools that can help them manage and increase their savings, and make the process more fun. For example:

• Greenlight: Greenlight is a money app and a debit card that parents can set up and manage for kids from ages six to 18. The app lets you set and track savings goals and set up controls for their spending. Plans start at $5.99 a month.
• Youth savings accounts: You can open a youth savings account at a bank or credit union. Then, use the bank’s mobile app to help your child make their first deposit and show them how to monitor their transactions and read their monthly statements. Depending on the account, you may also be able to help them set up “buckets” or “vaults,” which are like digital envelopes marked for separate savings goals. 
• Venmo Teen Account: If your child is at least 13, you can help them open a Teen Account on Venmo. Managing an app like this can help them get used to tracking a financial account. You can also use it to pay them for chores or transfer them any money you’re contributing to their savings. 

3. Show your child how to recover from setbacks

Saving money doesn’t always go according to plan. Just like any adult, your child might face setbacks while they’re saving. Perhaps they’ll need to pay for an unexpected expense or they won’t earn as much as planned from doing chores one month. 

Whatever the setback, it’s important for kids to regroup and keep working toward their goals. To help them stay on track, explain to your child early on that managing money sometimes means dealing with surprises. In fact, once they get older, good money management will involve preparing for emergency expenses and surprises like these. 

To help your child recover and stay on track, you might encourage them to save a small amount for unplanned purchases. If their savings schedule gets interrupted, sit down together to do some new calculations and update the timeline for reaching their goal.

4. Explain the tradeoffs of saving versus spending

Your child might learn quickly that saving money can mean making sacrifices. For some kids, it can be really challenging to forgo their favorite candy at the register or skip buying a novelty toy that every other kid in school seems to have. It can be especially difficult to pass up these purchases if your child knows they have money available in their savings.

Here are some ways to help your child stick with their savings plan, even when they’re tempted to spend:

• If they’re saving cash, have them leave the money at home when they go out.
• Suggest avoiding stores or venues where they’re tempted to spend money.
• Ask them to wait at least two days before deciding to make an unplanned purchase. 
• Have them keep a list of things they want to buy so they can work the purchases into their savings plan.

5. Make saving money fun for the whole family

For many adults, managing money is a solo activity. In fact, 30% report that they’ve hidden financial information from a spouse or family member. 

But you can teach your children that money isn’t a taboo subject or a secret to be kept behind closed doors. By getting the whole family involved, your children can learn the value of having people who will both hold them accountable and celebrate their wins. 

Here are a few savings activities that can be fun for the whole family:

• Have your kids help you plan a family vacation together and then contribute set amounts to your vacation budget. You might even assign them a specific expense to save for, like a family activity or their souvenirs. 
• Plan regular check-ins where you all sit down together to track your children’s savings and celebrate their progress, even if it’s just with a special snack or a movie night at home.
• Create a progress chart where you can easily see the change in your child’s savings balance. Come up with a fun ritual you can all participate in when the balance increases, like FaceTiming their grandparents with a savings update or dancing to a song your child likes.

Ultimately, your kids will be looking to you to set an example for how to save money. So you might even want to start a savings account for yourself and have your family follow your progress. If you’re not sure how to find room in your budget for savings, an NFCC-certified credit counselor can help!