10 ways To Teach Kids How To Save at Any Age

Grandfather teaching his grandkids to save money in piggy bank while sitting on couch at home all smiling.
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Teaching your children how to manage money might seem like it’s not important right now, but setting a financial foundation at an early age can make them feel more confident about money as adults. There are plenty of ways to start instilling good money habits before your kids are out of the house. These are lessons that your kids will thank you for later, or at least they should. Here are some ways you can start to make your children more familiar and comfortable with managing money. 

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Get Started as Early as You Can

Once your kids are old enough to start doing basic math, they can start to understand the concept of savings. Meet your kids where they’re at and see how they respond. When they ask for something at the store, let them know how much that item costs, then compare it to other items so they start to recognize how items are valued. As soon as kids start to understand the meaning of money more, they’ll start to see how it affects the world around them.

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Start a Bank Account for Them

A great way to set your kids up for success is to teach them about banking. You can set up a bank account for any child under 18, provided you sign on as an account holder. Start off depositing birthday money or a regular allowance to give kids some money to manage, then ask them to make financial goals based on items they want. In addition to a checking account, you can also set up a savings account so your child learns the value and satisfaction of budgeting for items they want. You can also make this savings account a long-term savings account that can help pay for their college expenses. Knowing they helped contribute to their college education can be an extremely gratifying experience for a child, as well as showing them how effective saving over time can be. 

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Describe Types of Savings

There are three main types of savings: personal, emergency and retirement. Educate your kids on how these are different. Empower them to make their own savings goals, or personal savings, then show them in your everyday life how “emergency” costs can come up. Start to introduce them to the concept of retirement, and how that savings is built. You can use your own paycheck to start. Be honest with your kids about how much of your income goes to retirement, and how that will serve you in the future. Even if kids don’t fully understand at first, having some familiarity with the different types of saving will open their eyes to all of the benefits of putting money away. 

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Define the Essentials & Non-Essentials

At first, your child will probably want to spend money on anything and everything. It’s important to show them what’s needed and what’s not. For example, you can show them that sometimes, expenses are necessary, like food. Things like toys are not necessary, but you can let your kids know that when they have paid for all the necessary expenses and have money left over, then they can make room for non-essentials.

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Talk Out Your Spending

When you’re at the grocery store, explain to your kids how you’re choosing what to buy. Perhaps say that you’re buying a generic brand of one item because you want to buy a more expensive item, so this choice helps you to save money for the expensive one. Seeing a real life example of the power of saving helps kids grasp why saving is important, and how it can help them in the future. 

Make Your Money Work for You

Include Them in Financial Decisions

Think about big expenses in your life that your child has a stake in. Maybe this is where to go out to eat, or even larger expenses like what car to get. Try to incorporate your child as much as possible (even if you already know what decision you’re going to make). Letting them see adult financial decisions will make them realize how powerful money can be, and bringing them into those decisions after they’ve learned the value of a dollar can make them feel more confident around money. 

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Don’t Give Them Money Every Time They Ask

If you give your child cash at every opportunity, they’ll never truly learn the value of a dollar. A set allowance is a great way to show kids that they have power over their money–while also showing them that their earnings are finite. The first time they want to get something and realize they don’t have the money for it will teach them that they should prioritize what they really want, versus buying everything they can. 

Give Them a Debit Card

There are lots of debit cards designed for kids to learn about money. One is Greenlight, which allows you to pay your kids, then monitor how they’re spending their money. Greenlight also allows you to set controls on the account, so spending doesn’t get too out of hand. Kids can also earn 2% on their savings balances, which shows them how savings accounts can earn money over time. 

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Talk About Debt

Credit card debt affects 45% of Americans. If you’re not talking about debt, you’re not giving kids a full picture of the financial landscape. Talk to your kids about how you get into debt, and how you can get out of it. Don’t demonize it, but rather talk about it as a normal occurrence, how it happens, and what can be done once you’re in debt. 

Lead By Example

If you’re not great with money, your kids will figure it out. Try to make it a learning experience for both of you. Show how you’re fixing your financial situation, or trying to save for certain goals in your life. Celebrate your wins together, while also pointing out your money mistakes. Kids will see that money is an ongoing topic, and that even if you mess up, you can always course correct and get better. 

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About the Author

Sam DiSalvo is an LA-based comedian, writer and actor who's performed all over the country. Her written work has appeared in numerous digital publications. As a copywriter, she's worked with a variety of major brands including GoldieBlox and Thrive Causemetics. Sam loves dogs and is currently perusing leisure suits to buy for her corgi mix, Barry
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