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How To Teach Children To Save (and Actually Cherish Their Money)

For those of us who are parents, our kids are pretty much our world. Raising them is one of the biggest challenges we’ll ever face. And given that so many adults say they didn’t learn about finances while growing up, it’s no wonder we worry about how to teach children to save. 

Saving money, living within your means, planning ahead for expenses…these are all cornerstones of financial literacy. I definitely want my kids to have a much better financial education than I did. 

Fortunately, there are easy strategies for teaching children to save. Read on for great tips on instilling the ability to save in your kids!

Related: How to Teach Your Kids About Money

1) Talk About Money With Your Kids

I’d argue that this is the #1 thing you can do to teach children to save: talk about money (a lot). That’s because all the other strategies hinge on this habit. Don’t shy away from financial topics; conversations about money will help shape your children’s future. 

Try to weave money into your conversations naturally. Talk to your children about things like saving, budgeting, and investing on a regular basis. 

Easy opportunities to start a conversation about money:

  • A trip to the store
  • While paying bills
  • When planning your family vacation
  • If your child wants to join a club or team
  • When their friend or relative goes off to college

You want to help children build a healthy attitude about money as well as learn the basics of money management.

2) Teach Children to Save by First Teaching Them to Earn

Saving a portion of their birthday money is great, but even better is showing kids how to save from their earnings. A key money lesson for children is how to earn their own money. 

Many families use traditional allowances to offer those first experiences of “saving vs. spending.” This can be a weekly or monthly amount. You could tie the allowance to chores (they don’t get the money if they don’t do the work). 

Whether or not you agree with allowances per se, you can definitely encourage them to make their own money. Kids can be entrepreneurs, too! You might help them brainstorm ideas that are age-appropriate.

How to teach children to saveKids’ Business Ideas:

  • selling handmade items
  • pet-sitting
  • babysitting (even if they have younger siblings, that counts!)
  • lawn care

For a lot more suggestions, check out 34 Kid Friendly Business Ideas (Make Some Real Money!! 

3) Practice Goal-Setting

Saving money is largely about planning ahead to reach a goal. No matter the dollar amount, kids and adults need to learn how to set financial goals. These goals then drive your motivation to save money. 

Related: 15 Short Term Financial Goals

If you’re just starting to teach your children to save, then center their savings around specific goals. Your child may want a $5 trinket or a $5,000 car: either way, the principles of saving are the same. 

You can help your children flex their savings “muscle” from a very early age. They should learn that they don’t instantly get everything they want. 

When practicing how to teach children to save, explain to them the basics

They need to know…

  1. how much an item or experience will cost, and
  2. how much they earn

Then they can figure out how long it will take them to save up the money. (You might give them extra chores if they want to earn faster.)

Below are some great examples of real-world timelines and how to calculate them:

  • $10 toy and $1 weekly allowance = 10 weeks to buy it
  • $50 shoes and $10 weekly in allowance and chores = 5 weeks to buy them
  • $5,000 car and $250 weekly from part-time job = 20 weeks (5 months)

When talking about a savings goal, this is also a great time to point out that fun doesn’t always cost money. In your day-to-day life, show them how frugal can be fun! Check out 50+ Creative Things To Do On a Budget (With Kids!)

4) Give Kids a Place To Save Money

This is an important step in teaching children to save.

For very young children, experts recommend a clear jar where they save their money. The younger the child, the more important it is for them to get the visual of their dollars and cents. 

Usually by age seven or so, kids are ready for a real bank account. Take them to a branch that’s open, or even let them open up an online savings account. 

To learn how to teach children to save, you must model that behavior for them. You might show them your savings statement or talk about how much you put into it each month. Then, be sure to help your kids monitor their savings regularly. 

Related: How to Save $10K Fast (In Just 4 Steps!)

5) How to Teach Children to Save With Incentives

Who doesn’t love a reward for doing something you know you should do anyway? Don’t knock the reward system—after all, it’s exactly how 401(k) matching works for adults! Help motivate kids to save money by offering incentives. 

Incentives for kids don’t need to be complicated.

  • You might offer to match their savings dollar-for-dollar, if you’re really generous.
  • Or offer a percentage (for every $1 your child saves, put 25 cents in for them).
  • Another fun incentive is to give a bonus each time your child reaches a savings milestone. Add on $5 each time they reach another $50 in savings, for example.
  • Or for a large goal, give them a bonus every so often, like at the halfway point to the total.

These are just fun ways to show kids the value of not spending their money now. 

6) Model Saving Money For Your Kids

Setting a positive example for your children is one of the best things you can do for them. Whether it’s in relationships, work ethic, integrity, or money, your kids learn by watching you. 

Make sure your children know you prioritize saving. You can model this every day for them. In your daily decisions about spending and saving, they should see that you don’t buy everything you want. Let them know you save for big purchases. 

Little comments like, “I’d love to get a coffee, but I’d rather save that $4 towards our spring break,” can stick in kids’ minds. 

Teach the Habit of Saving Money

The earlier your child starts learning how to save money, the easier it will become. We tend to settle into patterns and habits, so it’s important to teach kids savings skills at a young age.

Do you have any fun strategies for how to teach children to save?

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AUTHOR Kate Underwood

Kate Underwood loves reading, talking, and writing about all things in personal finance. She made the switch from her high-school teaching career a few years ago to become a full-time freelance writer and editor and can be found at kateunderwoodwriter.com.

2 Comments

  1. We are trying to do all these things with our kids even starting at ages three and five. So far they seem to be getting it. They like to save their money for a big ticket item. We’ll load in interest starting sometime soon too, i’m interested to see what happens!

    • Ha, very cool! We just started an ice cream business for our 4 year old daughter. She earns $1 per sale. After just 2 months, she already has $30 stacked up in her clear piggy bank! She pretty much never asks to do anything with it…so maybe she’s a saver at heart! Hope so! Maybe we’ll put some in an account soon so she can watch it grow with interest. It really is a cool process, isn’t it?!


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