Teach your Child to be a Saver

Learn how to raise a saver!

By: The Family Money Team

07.29.2021

Start by encouraging good financial habits, based on the child’s age— it's never too early to learn.

Key Points

  • Start the conversation about saving
  • Use small chores and allowances to encourage good habits
  • Reward kids for smart financial choices

It is never too early to teach your children how to be savers. Start by encouraging good financial habits, based on the child’s age. Kids around 8 years old can start doing age appropriate tasks around the house and receive an allowance. Try to avoid just handing money out, because that’s not how money works in the real world. The first step to becoming fiscally responsible starts with parents having a conversation with children. 

Here are a few tips to help start your discussion.

Young children: Start by encouraging good financial habits, based on the child’s age. Younger children can start doing little chores and be rewarded with an allowance. Help them connect the idea of saving and spending. Discuss with your children what they wish to spend the money on.  Do they want to save it for a trip to the toy store? Saving and goal settings are an essential part of their financial education. 

Ages 9-12: Start a conversation about setting goals. Now that your kids are doing chores and saving money, it’s time to introduce them to set some goals. One way to teach children is by example. When a parent sets a goal of saving $2,000 for a family trip, kids can watch and help reach the goal. They observe the parent going to work each day to earn money, making pizza at home instead of going out, watching movies on a streaming device rather than at a theater or taking public transportation instead of driving. It provides a good opportunity to discuss the child’s goals too. Maybe they want some extra spending money for the trip. If they want to save their allowance, you can help them figure out how many weeks it will take to save their spending money.  It takes perseverance to stay on track and willpower to avoid spending the savings on something else. All these scenarios are opportunities to learn and experience real world consequences. Family Money can help you set your child's allowance and track their spending habits. Encourage your children to come up with some fun ideas about ways they can both earn and save money. Are there some extra chores that need doing around the house? Working with your child and helping them understand the power of earning is a key element of a financial foundation.

Ages 13-19. Teach to save for multiple goals. By this point your kids are used to handling money and understanding the basics of saving. Now may be a good time to introduce the bucket method. Using the bucket method strategy teaches kids to put money away for specific purposes and helps them understand both short and long term goals. An example of a short term goal might be tickets to an upcoming concert, while a mid term goal could be something like a new laptop. It is important for teens to comprehend that there is a need to save before using discretionary spending. Family Money allows kids to have a place to save for short-term saving goals because it reinforces the visual aspect of saving. In the app, parents and teens can see at a glance where money is being spent.  Your child can create a good habit of saving at least part of any money received for birthdays, holidays, and special occasions.

Consider Giving a Bonus. It’s a great idea to reward good saving habits. Teenagers may find saving money more rewarding if parents match funds or give a bonus. For example, if your teenager is trying to save  $100 to buy designer jeans, you could give them a bonus of $20 once they are halfway to their goal. It reinforces the importance of saving and may set the stage for saving for serious goals, like college, as your child matures.

Whether the topic is saving pennies in a jar, downloading the Family Money app, or sending your kid off to college with a credit card, helping kids learn healthy habits around money takes a lot of work — and patience. The very first step on your child’s path to financial literacy begins with you and Family Money is here to help.

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