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How to Teach Kids to Save Money

Updated on December 30, 2010

How to Teach Kids to Save Money

There are both short term and long term benefits of teaching your children about money. In doing so, your child will develop strong savings habits, learn how to make smart purchases, and help them to avoid accumulating debt. You can help your child learn the value of saving for the future and help them plan for financial security with these simple savings tips.

Give, Save, and Spend

Label 4 jars (or piggy banks) with the words "give", "long-term savings", "short-term savings", and "spending".


Label the first jar "give". The money that goes in this jar if for your child to "give" to charity.


Label the second jar "long -term savings". The money that goes in this jar is for your child to save long-term. This money should never be touched. The goal is for your child to save this money until he or she reaches the age of retirement.


Label the third jar "short-term savings". This money should only be used on things that they are saving up for, such as a new bicycle or a car when they reach the driving age.


Label the fourth jar "spending". This money is their spending money. Teach your child to budget this money and to spend it wisely. Once their "spending" money is gone, do not let them use any money from the other 3 jars.

Savings Tip

Every time your child receives money (i.e. birthdays, Holidays, allowance), have them put 10% in the "give" jar, 10% in the "long-term savings" jar, 10% in the "short-term savings" jar, and the rest in their "spending" jar.

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Teach your child to save at a very young age. The younger the better. - Baby's First Piggy Bank

Motivate Your Child To Save

A great savings motivator is to "match" your child's savings. For example, you can offer to give them $5 for every $5 they save. This reward system will encourage them to save their money even faster.

Another option is to offer to pay them interest on the money they save. For example, give them 50 cents for every $5 they save. Not only does this provide extra incentive, but it also helps to give them a basic understanding of the concept of interest.

A third option is to set a savings goal that will reap a small reward once they reach their goal.

Visual Charts


Have your child track their allowance on a worksheet.

Savings Chart

To encourage the learning and savings process, have your child make a savings chart so they can record their savings and see it grow. The chart will be a visible reminder of what they have achieved and what they still need to achieve. Place this chart on the refrigerator or in their bedroom. You can have them set a savings goal on the chart and add a sticker or offer a reward every time they reach their goal.

When To Teach Your Child About Money

Teach Early

The best time to start teaching your child about money is when they begin to notice it. Even very young children can begin to understand the concept of earning money. Teach your child that money is earned by working, and that you can only spend what you earn. To help them understand what it's like to get paid on a schedule, begin paying them an allowance. Then help them set goals for how they spend and save their allowance. Make sure you stick to the payment schedule and savings plan otherwise the lesson may be lost.

Use leaning toys or play money to teach your child how to count money.

Help Your Child to See Their Increased Worth Of Money

Increased Worth and Value of Coins

Help your child to count their money about ever 2 months. Exchange the small coins for dollar bills. Not only will this help them to see the increased worth of their money, but it will also assist them in understanding coin values.

Cool Binders from Zazzle

These are cool binders for keeping track of savings, investments, money charts, financial statements, budgets, and other money related matters. Click on any product to purchase from Zazzle.

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    • profile image

      Heard_Zazzle 7 years ago

      Many thanks for featuring my Auto Expenses Binder. Great info and ideas! Susan,*

    • LotusMalas profile image

      LotusMalas 7 years ago

      Excellent, excellent ideas! And cute piggy banks too :)

    • piedromolinero profile image

      piedromolinero 7 years ago

      You have some great tips here to teach kids the value of money. I shall soon start to implement some of these tips in teaching my little one about it.