Tips for Teaching Kids About Saving Money

It’s a difficult thing to teach kids about the importance and value of money, yet money management and financial literacy is something that follows us through our entire lives. As parents, we want our kids to not one day live paycheque to paycheque, or have to face massive debt. So, it’s crucial that we lay the foundation now when they are young, so that they develop and master those skills. After all, we all know even the youngest of kids want things {or all the things} and even the smallest amounts of money money, this is your cue that the education can start now.

Thing is, children have trouble imagining the far-off future when it comes to saving money. They also have trouble distinguishing between needs and wants, and they need assistance in budgeting. This is why I say teaching kids about saving money can be difficult but I’ve often said before, that I want to raise money-smart kids. So, here are some tips: 

Teach the Difference Between Want and Need

Use your own life and spending as examples and teach home budgeting. Illustrate how you need power, water, milk, and toilet paper. Then, when you purchase items like new DVD’s or candy – explain that this isn’t a need but a want. One idea is to practice when shopping using a limited budget, and explain why you are choosing to buy bread instead of an item that would be nice to have, but not a necessity.

Use Coupons and Sales

A frugal fanatic at heart, my kids know all about coupons and looking for sales. Teach kids about regular price and what it means when you cut those costs down. Again use examples like, “If I use this coupon when buying this item, we can also get this pack of gum!”. My kids love pointing out coupons and telling me about a new rewards program, it’s like a fun game to them, and they want to win!

Set a Good Example

We all know kids are sponges and they do notice every little thing that you do. If you have a savings, clip coupons, scour the sales or are putting money aside for that larger wanted item – show them! Through examples and seeing that even Mom and Dad save money – they are more likely to catch onto the idea and want to do it themselves. 

Make them Earn It

Kids want money and ‘all the things’, so make them earn it. Give kids chores and allow them to earn an allowance so that they have money of their own. When they want something, refer to their chores and their allowance, and show them the value of money and the importance of savings. It’s all a perfect opportunity to teach, because if you want your children to be savers, you need to give them an allowance from which they can save.

There an App for that!

TD Lab created Family Allowance, a free mobile app experience downloaded by parents for their kids. The app is a virtual experience {which is not connected to real accounts} that allow parents to set up family profiles, allowance schedules, and chores {either weekly tasks or one-time jobs} for their kids. This app is a great way to track each kids {or even adults} earnings, spending and savings.

Ive been using the Family Allowance app for a while now and love that I can easily list chores for each of my kids {and the dollar value for each}, and check it off when completed. The kids love checking the app daily, to see what still needs to be completed, or check up on their savings thus far.

Each person added to the app can also set goals, like saving up for a new bike. Using the app makes it so easy for even my 7 year olds to see the direct correlation between what they want {and are saving for}, and how much they’ve earned so far. It really makes it simple for them to understand, and adds in a fun twist with a star rewards system in their ‘Achievements’ section. Kids like to collect stars, after all! 

Back when I used to have chore charts on paper, it was easy to lose track or forget entirely because it was only visible in one room of the house. With the Family Allowance app, I always have my phones on me – so I always have the opportunity to make chances as needed or show it to the kids. Especially in the store when the ‘I want this’ begging starts {as it always does}.

 
Teaching your kids to save money is an important lesson that they will take with them for the rest of their lives.

Have any other Tips for Teaching Kids About Saving Money?

Disclosure: This is a compensated post, yet as always, all opinions are my own.

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