Family Money Saving Tips

How to Teach Your Kids to Save Money

How to Teach Kids to Save Money
Written by Irina Vasilescu

One of the many things that parents need to teach their kids is how to save money. Whether you as a family are living on a paycheck-to-paycheck basis or if you are of a higher economic spectrum, knowing how to save money is a skill that the kids would take with them once they leave the nest.

While they’re young, you can give them light chores which you, neighbors or relatives could pay them for. The money they will earn can go towards their college money or a luxury item that they would like to buy. Working hard for what they want is yet another valuable life lesson that you can give them while they’re young.

When you have college-bound kids, you would have to teach them how not to rely on what you’re giving them as parents. Applying for a job would actually give them a preview of how it is to be out in the real world. As they start earning their own keep, they would also eventually learn the value of hard work and the importance of saving.

As you can see, there’s a specific lesson about saving money that you can teach your kids, depending on the age they’re in. Here, we will be dishing out individual tips on how you can teach kids to save money depending on how old they are.

These lessons are something that would be of value of them once they grow up. Also, instilling such money-saving habits while they’re young is a really important lesson which can be applied once they are living their own lives as adults.

Ages 2 to 5

The number one rule that parents should keep in mind when it comes to teaching kids how to save money is to start them young. Exactly how young does your child have to be in order to get him or her started on saving money? As early as two years old! Here are the tips on how you can get kids aged two to five to get started on saving money:

Use colorful piggy banks to get young kids to start saving

According to Beth Kobliner, a New York Times bestselling author who wrote “Get a Financial Life”, kids as young as three years old can already grasp simple financial concepts like saving and spending. Another report says that the money-managing habits of children start forming by the age of seven. 

What does this mean for you as a parent? These mean that it is never too early to teach kids about the concept of saving and spending money.When going to the supermarket, you can give your daughter a treat by giving her a couple of dollars to spend on any fruit or small food items that she wants. You can also use colorful piggy banks to get your kids to start saving.

By giving children that foundational knowledge of how they should treat money at a young age, they would grow up to be mindful savers, investors, consumers and givers.

How to Teach Kids to Save Money

Create labelled jars where your child can put money on

Piggy banks may teach two-year-old kids the concept of saving but for three, four and five year olds, having labelled jars is a big help. You can have three jars with labels for Saving, Spending and Sharing.

Let’s say that your son celebrated his fourth birthday and his grandmother gave him $20 as a gift. Have him divide the money on these three jars. Check how much he would put on the Saving, Spending and Sharing jars. If he divides the money equally, then he is getting an excellent start on managing his personal funds.

If there are two or more kids in the house, you can have them all contribute to these money jars or assign individual jars for them.

The Spending jar can be used to buy small ticket items like stickers, candy or small toys. For the Sharing jar, the money can go towards charities in the local community, or for helping out a friend’s cause. The Saving jar can be used for more expensive items, like a gadget that all kids in the house can use.

Teach your kid to set a money-related goal

Each savings fund should have a purpose and the same thing applies to your kid’s money.

Let’s say that your daughter would like to enrol in karate classes but she does not have a uniform for it yet. You can motivate her to save $10 from her own money to buy the karate uniform, and you can provide the rest of the amount. A too-expensive goal might make her feel frustrated, especially if the amount takes too long a time to be pooled together.

For kids aged four to five, have them help you clip coupons

Children who can now read would be able to recognize coupons from magazines which they can help you cut out. Bring them to the grocery store when using these coupons so you can teach them the value of being savvy consumers by taking advantage of such great deals.

All these money saving tips for kids aged two to five are a great training ground for them. By teaching them how to be patient and detail-oriented when it comes to saving, they would realize later on that they can easily manage their own finances once they grow up.

Ages 6 to 12

Next, for children aged six to twelve, here are the money-saving exercises that you can practice at home:

Use apps or board games that help them understand money

Board games like monopoly are fun and give children an idea about how to use money wisely. Aside from that, playing board games serve as an excellent activity for the entire family to bond. You can also use tablet computers as a teaching tool by downloading money-related apps.

There are plenty of applications that you can download for iOS or Android devices which are specifically meant for kids aged six to twelve. These apps will help them save money on the bank, teach them how to budget, give them basic ideas on how to invest, etc.

Open up an account for your kid at the local bank

Once your kid reaches that age when he or she is receiving an allowance, where would the money be placed? This is where you can make an event out of opening up an account at the bank. There are many financial establishments offering savings account products for children.

Encourage your son or daughter to make regular deposits to this account – and as mentioned earlier, the funds should have a specific purpose. The money can go towards college fund or to buy something that you cannot otherwise afford.

Teach kids the value of comparison shopping

Kids of this age range would be avid consumers by now so as a parent, you need to teach them the value of comparison shopping. If your kid is adept with using computers, have him or her go online to look at the different prices and specifications of any item that you are looking at.

Don’t forget to highlight the value of choosing quality over price. Get your child involved in making money-related decisions, such as when you are buying grocery items for the house. You’d be surprised at how eager your kid is to learn about these practical skills that they can use for when they grow up.

How to Teach Kids to Save Money

Give them ideas about how to make money

If your son wants to buy the latest edition of a gaming console, have him work extra hard for it. Give him ideas about how to make money. How about holding a garage sale where he can sell all the unused things in his closet?

Girls can bake, sell lemonade or offer babysitting services to neighbors or close relatives. Boys can offer to do age-appropriate household chores and be paid for it. Not only will these things add money to their savings accounts, but it will also teach them the value of hard work.

Ages 13 and Up

Finally, for kids aged thirteen and up, it is important to make them realize the value of saving. Here are a few ideas on how you can do that:

Have your kid set long-term financial goals

If you have a thirteen year old son, do you have enough funds to get him to college or are you still saving up for it? If he really likes studying, then he would be more than willing to contribute to his own college fund by working extra hard at household chores which you can pay him for.

He can also save money from his own allowance and scrimp on everyday luxuries so he can have more money to save for long-term goals.

Teach your child to use credit wisely

If you were able to instil in your child the value of saving, you might not have to teach this lesson at all. However, in a college or university, there will be many institutions offering pre-approved credit cards. If your kid does not watch out, he or she can fall into credit card debt even without knowing what the plastic card was actually swiped on.

Teach your college kids to use credit cards responsibly, or prevent them from using the card at all – unless they are able to pay the total bill amount per month.

All in all, teaching your kids how to manage money is essential. When you start them young, they will develop great money management and saving skills – something that will be very useful for them once they are living on their own, out in the real world.


About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • Our daughter is 9 years old. We tried some of the things you suggested for younger kids and they worked out great.

    Recently we have gotten into couponing and she helps my wife clip and organize, so she is getting into the idea of comparison shopping. But the biggest thing has been her savings account. When she gets money, for example Christmas money, she asks us to let her put it in the bank. She already understands that if she carries money in her purse, she will spend it on treats and it is gone, but if it is in the bank, it is safe for when she really wants something.

    You have some great tips here and any parent reading should give them a try.

  • I agree. It is very important to teach kids the value of money, they need to learn it from someone. Having a piggy bank for them to save the pennies is a great idea.

  • I definitely agree with opening a savings account for your kids. My parents did that for me when I was in elementary school, and I would put the small amounts of money I got for birthdays or holidays in there. I really enjoyed getting the bank statements in the mail every month, though I paid less and less attention to them as time went on. Before I started college I closed that account to open one at a bank that had branches near my school, and I was surprised to really see how much money I had accumulated by putting $10 or $20 at a time. It can really make a difference over time.

  • These are excellent ways to teach your children the benefits of saving money. All it takes is a quarter in the piggy bank every second day to add up to a lot of money (at least to a child) over a month. This is an essential skill that will prove itself very useful later on in the child’s life. So whether they like to save or spend money by habit, the suggestions in here will certainly help!

  • I remember for Christmas one year one of my uncles sent me and my sister a Canada Post piggy bank. it was a little mailbox that said ‘Canada Post” Up until that point I kept my change in a tin can. Anyways it was nice to get, not the cutest piggy bank but it worked. And thankfully for Christmas one year my parents opened us a savings account which also is nice.

  • 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.

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