13 Tips to Teach Children to Save Money

Teach Children to Save Money

When I was young, I learned from my parents to save money and be frugal. I watched as my parents would save for an item, then purchase it when they had the money. Even though they may have wanted an item right then, they usually they did without, made due with what they had or purchased an item at a second hand store because it was less expensive. They taught me and my siblings to save most of the money we earned and put it into a savings account. And they said that if we saved money, it would help us to be able to pay for some of our college education. Because of their encouragement, I almost paid for my entire college education without taking out a student loan. You can read more of my story, My Financial Life Journey and the Lessons I Learned by clicking here.

Now that I’m a parent, I want to teach my kids how to budget, save money and stay out of debt. I’ve seen many times where a child grows up and moves out of the house only to start buying everything he or she wants with a credit card. They see what their parents have, and they want all of that now. Some of them don’t realize that it takes years to acquire the items that are in a home. Teaching children to save money isn’t easy. They usually want to spend money they receive immediately. Below are ideas to teach young children and teens how to save money.

Teaching Young Children to Save Money


1. Set a Good Example
One of the best things you can do is let your children see that you save money too.  Place money in a jar while your children are watching and tell them it’s your savings jar. Let them know what you are saving for and what you want to purchase with the money that is saved. Most young children want to be like their parents, and seeing you do it will provide them with money lessons that will further inspire them to save.

For our family when we decided that we wanted to take a family vacation to Disneyland, we made it a family goal to save together. We helped our kids create Disneyland savings jars (see photo above), and they did extra chores around the house to save money for Disneyland. They also had a lemonade stand and sold baked goods. The money earned went into their Disneyland savings jars. They were so excited to save that they would regularly ask us how they could earn money to go to Disneyland. Head over here to read How to Vacation at Disneyland on a Budget and how our family was able to go do Disneyland on a budget.

Teach Children to Save Money

2. Use Different Envelopes/Jars
For younger children when it comes to learning concepts like saving, the visual and physical interaction are important. Using either envelopes or paper taped to jars, have your children draw pictures of what they want on their savings containers. Teach them to set aside money for short-term goals, such as a specific toy or electronics, and long-term goals, such as a family vacation. And have another savings container or envelope for spending on everyday items. Help your children understand that it will take longer to save for some items.

My oldest daughter has watched as my husband and I save for items we want. We have envelopes for family vacations, Christmas, food, extra money to pay towards mortgage, and fun items we want to purchase. My oldest daughter now has multiple bags and containers of money so she can save for things she wants, a college education, and to set money aside in a savings jar. In the photo above, you can see all of the savings containers she has, and each is designated for a specific item she is saving for.

3. Open a Savings Account for Kids
In addition, open a savings account for kids. Encourage them to deposit a portion of the money they earn into a savings account. Help them track the interest they earn on the account so they can see it grow. As a kid, I enjoyed having my own savings account, and I would keep track of every cent in a register book as I added more money to my checking or savings account. It was exciting for me to watch my savings increase!

4. Make a Savings Goal Chart
Once you know what your child wants to purchase with the money she is saving, figure out how many weeks it will take to save enough money for the item and make a chart. Represent each week on the chart with a box and have your child put a sticker in that box when she earns money. This way your child can track the progress visually and knows that she is getting closer to the goal.

Teach Children to Save Money

5. Offer Rewards for Saving Money
Consider rewarding your children for saving their money. For example, if a child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves, such as stickers, an extra 1/2 hour of video games, toys, special outings or whatever motivates your child.

6. Match Your Child’s Contributions
A “savings match” can be a great way to encourage children to save extra money and get an early peek at the benefits of a company match for a retirement savings program such as a 401k. For every dollar your child saves, offer to put in a matching contribution. When they are little, you might be able to match 100%. Once they are older 25% or 50% might be reasonable to encourage them to save. 

7. Help Them Spend Money
Occasionally, children will get so focused on saving their money that they won’t spend any money along the way. Help them enjoy their money by spending some on small purchases or by surprising them by buying something they would like.


Teach Children to Save Money

Teaching Teens to Save Money

The tips above are ideas to help young children save money, but as your child grows, you might need different ideas and methods to teach them to save. Here are some ideas to help teens save money.

1. Help Your Child Prioritize
Have an older child write out a list of things he or she wants and prioritize that list. This includes long-term items such as a laptop for college, a graduation trip, or even the down payment for a house someday. Have your child allocate an amount of their income to each goal. These are the beginnings of a financial plan and this type of thinking will help your child in the long run.

2. Allow Your Child to Make Mistakes
Sometimes the best lesson comes from a poor decision, especially when your child is young and the financial loss won’t be so great. For instance, there may be a time when your child takes his money and spends it all on one item only to realize he doesn’t have enough money for something else he wants or needs. Don’t just bail him out and give him money for the item he needs. Take this opportunity and make it a teaching moment about money and the importance of saving money and spending it wisely. After doing this, your child will begin to learn that he needs to think first before he spends.

3. Play Money Games
There are a number of money games available to teach financial concepts to children. Monopoly and The Game of Life, for example, can teach money management skills as well as the importance of planning ahead.

4. Talk About Money
While you may not want to discuss your salary in front of your children, you may want to let them hear you discuss your financial plan and the arrangements you are making for retirement. This could simply be having a conversation with your spouse while your children are in the room. Hearing this allows your children to understand that saving is a lifelong endeavor.

Even though our children are still young, my husband and I regularly talk about saving money in front of our children and what we want to save up to purchase. This has helped our children know that it is important to save money, and they now want to save money too.

Teach Children to Save Money5. Look for Good Deals with Your Children
One of the keys to saving money is looking for deals on purchases the child wants to make. If you find an item at the store, suggest to your child to look online to compare prices first before buying it. This can be an enjoyable game to see if they can find it less expensive. It will also teach them to think before buying and not to buy something impulsively.

6. Point Out the Positive
Praise your children for any amount of money they save, and continue to encourage your child to keep saving even if he or she is wasteful with money. Trying to point out the positives will hopefully help them to do better at saving money.

What tips do you have to help your children save money?


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  1. Every child needs to understand the difference between wanting something and needing something. Children want instant gratification, but creating opportunities for delayed gratification is one of the best gifts parents can give children. As an exercise for older children, have them plan a meal for the family. Take them shopping with a set budget in mind, and see how they manage it while in the grocery store.

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