10 Ways to Teach Your Child to Save Money
Teaching your child about money is one of the most important life skills you can give them. It sets them up for financial responsibility and freedom.
If you want to make a big difference in your child’s future, you need to teach them how to manage money from a young age. If you don’t know where to begin, here are ten ways to help you get started!
Related Post: 7 Money Tips for Young Adults
1. Lead by Example
Children are watchers, they copy what they see in adults. If you want your child to develop good saving habits, model those habits yourself.
Let them see you saving money, making thoughtful purchases and avoiding impulse buys. Talk to them about your financial decisions, like why you’re saving for a family holiday instead of buying a new gadget. This helps them understand the value of money and the benefits of saving.
Key Point: Actions speak louder than words. Show your child how to save by being a role model.
2. Start with a Piggy Bank
The old piggy bank is a simple but effective way to introduce your child to saving. Encourage them to put a portion of any money they receive into it, whether it’s from allowances or gifts. Over time, they’ll see their savings grow.
For younger children, you can make it fun by choosing a piggy bank in their favourite colour or design. You could also introduce the idea of labelling it for specific goals, like a new toy or a book.
Key Point: A piggy bank is a fun and hands on way for young children to start saving and understand accumulation.
3. Set Savings Goals Together
Goal setting is a powerful motivator even for children. Sit down with your child and help them set a savings goal. It could be something small like saving for a new toy or something bigger like contributing to a family holiday.
The key is to make the goal achievable and within a time frame that matches their attention span. By doing so, you can teach them patience and the value of working towards something they want.
Key Point: Setting savings goals helps children understand planning and delayed gratification.
4. Teach Budgeting
Budgeting is a skill your child will use for life. Start simple: teach them to divide their money into categories – spending and saving. If you want to get more information about budgeting this post can help you to do it!
Key Point: Early budgeting habits teach children to manage money well.
5. Use Real Life
Everyday life is full of teaching moments. Take your child shopping and explain how you compare prices, look for discounts and choose the best value. You can also talk about needs and wants when buying.
Key Point: Use daily activities to teach your child practical money-saving skills.
6. Open a Savings Account
Once they’re a bit older, you can open a savings account in their name. This is a big step in understanding how banks work and the concept of interest. Involve them in the process, from filling out forms to making deposits.
Explain how interest works and how their money will grow over time just by leaving it in the bank.
Key Point: A savings account teaches your child about the banking system and interest, and the benefits of saving.
7. Teach the Value of Work and Earning
Work and money are connected. Get your child to earn money through age appropriate small jobs. This could be as simple as paying them to clean their room or help with gardening.
When they earn their money, they’ll value it more and be more likely to save rather than spend it.
Key Point: Earning money through work helps children understand the value of hard work.
8. Discuss Needs vs Wants
Teaching your child the difference between needs and wants is key to good money management. Needs are essentials like food and clothes, wants are nice to haves but not necessary.
You can give a shopping list to your child and tell them to categorise the list items’ as needs or wants during shopping. This may help them prioritise their spending and think twice before buying.
Key Point: Understanding the difference between needs and wants helps children make more thoughtful spending decisions.
9. Use Technology to Your Advantage
There are many apps and online tools that teach kids about saving money. These platforms have games, challenges and rewards to make learning about money fun.
For example, PiggyBot and Bankaroo let kids set goals, track their savings and even manage a virtual allowance.
Key Point: Use technology to make learning about saving money fun for your kid.
10. Celebrate
Finally, celebrate your kid’s savings milestones. Whether they saved for a toy or a bigger purchase, you should acknowledge their effort and discipline. This positive reinforcement will encourage them to keep saving and build their financial confidence.
Key Point: Celebrating savings milestones reinforces positive financial habits and encourages your child to continue saving.
Final Words
Teaching your child to save is a big part of their development. Use these 10 ways to help them build a solid foundation for financial success.
Remember, as they get older these lessons will change but the principles of saving, budgeting and spending will stay with them for life.
So, get started today and watch them become a smart money person who can make smart money decisions in the future.
Thank you for reading our guide to teach your child to save money. To keep learning and developing your financial literacy to teach money to your child, we highly recommend you to read the additional resources below:
