Some Tips on Teaching Your Child about Saving Money

As a parent, you always desire your children to have the best in their young lives. Your desire while helping them is to offer counsel and instructions that would transform them for the better even if it is a difficult thing to do. Concerning finances, many think that it could be confusing or even stressing to the children. But financial education can be basic and fun. Now, it is more important than ever to prepare children for real life, for knowing and experiencing how to handle money.

Teaching Your Child on the Saving Process

Children are miniature and they are a replica of the society that they find themselves in as they imitate everything they see and acquire. Thus, it is possible to conclude that the best way to influence them and to teach an effective action of saving is to let them observe and practice. It is seen that when children are introduced to financial concepts at an early age, later in life they become better equipped to make good and sound financial decisions.

Making Saving Fun

Suppose you decided to buy a reasonably cheap video game. You can also engage the child in the management of the money and act as if he or she is your own banker. They can let the money sit in a piggy bank or in any other secure place that they choose to put it in. To make it even more appealing, give them interest. For example, if the money to be spent on the game is 1,000 Dollar, for every 10 Dollar that they saved, give each of them one peso for every week the money is not spent. This does not only help to imbibe the culture of saving but also helps to teach them how to make money grow through the instrument of interest.

Teaching Finances Through Goals

On the whole, incorporation of material about finance into games is highly useful and successful, but, occasionally, an idealistic approach is helpful. For example, if your child wants a ball with the logo of the last World Cup and it is not the occasion for celebration such as a birthday or Christmas they can realize this through saving. Come up with a proposal in which they pocket a percentage every week, perhaps 1% of that week’s allowance, and you do the same. This also helps them to learn how to save money as well as give them the feeling of delayed rewards.

An Incremental Saving Plan

An incremental saving plan could look like this:

  • Week 1: Put 1% of allowance aside
  • Week 2: Set aside 3% of allowance
  • Week 3: Save one-fifth of allowance
  • Week 4: Save 8% of allowance

The increase in the percentage to be saved is gradual, thus assisting the learners in developing a sound saving culture in the long run.

More Savings Methods

The 52-Week Method

This is a very simple and effective technique where a certain portion of money is saved in a week where the portion in question rises every week. Here’s how it works:

  • Week 1: Save 1 peso
  • Week 2: Save 2 Dollar
  • Week 3: Save 3 Dollar
  • Week 52: Save 52 Dollar

In the end of the year, your child has saved one thousand, three hundred seventy-eight Dollar. This, of course, may not mean much to an adult, however, to a child, this can be quite a lot. About this method, one can note that it nurtures discipline and a regular craving to save money.

The Reverse 52-Week Method

An alternative to the standard method starts with the highest amount:

  • Week 1: Save 52 Dollar
  • Week 2: Save 51 Dollar
  • Week 3: Save 50 Dollar
  • Week 52: Save 1 peso

This method builds on the initial motivation, which is usually the highest, and reduces the saving amount towards the later part.

Savings with Envelopes

In this method, 52 numbered envelopes are put in a container. Every week, your child chooses an envelope and puts the amount written on the envelope in a piggy bank. It makes things a bit more exciting with a twist: what DVD refers to as ‘The Surprise Entertainment’. But, it has to be fluid because there are some weeks where one has to save more than the other.

Adaptive Savings

Adaptive savings allow flexibility based on the available budget:

  • Week 1: Save 50 Dollar less on each purchase
  • Week 2: Save 10 Dollar
  • Week 3: Save 20 Dollar
  • Week 4: Save 1 peso

Flexibility is one of the key points; still, it is rather challenging to stay disciplined enough not to save much less than it is actually possible.

A Review of the Ant Philosophy Webinar by Jim Rohn

Ants as a part of nature offer a proper philosophy that can help children. Ants exhibit four key traits that can be applied to financial education:

  • Persistence: Ants do not stop working or looking for something to do. When they face a challenge, they make a detour. Explain to your child that he or she should be relentless in saving money.
  • Preparation: Ants consider the winter of the coming year throughout the entire summer. They store foods that they get during the summer for the winter. Urge your child to save for future use or just for emergencies.
  • Maximizing Resources: Ants save what they can, the same way a man would save whatever is available. Explain to your child how they should be wise when using their resources so that they do not use them up.
  • Optimism and Realism: Ants fully realize that winter is not definite and will be gone come springtime. Explain to the child that he or she should look forward to achieving the financial goals that seem to be attainable, while also telling the child that he or she needs to save.

Implementing Financial Education

Set Realistic Goals

Teach your child about proper saving targets that can be easily attained. For instance, if they wish to have a new toy or gadget, explain to them the amount of saving required and how they can get it in a week. This also helps them learn planning and working towards the realization of a certain goal.

Use Visual Aids

Buy charts or graphs and other stationeries that will be used in presenting progress made in saving money. Visual representations could help make it a little more real and the idea a little more inspiring. For instance, a chart that has a goal at the top and the weeks’ savings marked may help them see how much they are away from the goal.

Encourage Earning

Explain such aspects as earning money. This may be regarding minor domestic chores or other assignments at home. This makes them appreciate work and the connection between the amount of work they do, earning money, and their capacity to save.

Teach Budgeting

Teach them how to draw up a basic budget. Teach them how to divide the allowance into baskets: the basket that needs to be used to save the money, the basket for spending, and the basket for giving to the needy. This prepares them on the subject of budgeting and financial planning right from their childhood.

Provide Incentives

Encouraging your child to save can be done by attaching some bonus or some other type of reward to it. For example, you could promise to contribute a certain amount that is equal to the amount saved and attained by the individual at regular specified levels of saving. This makes them save with more vigor.

Discuss Money Matters

Make it a routine to talk to the child about matters related to money. Break down the terminologies of interest, loans, and investment in simple language. Ensure these are initiated as a normal part of their learning so that they are not ashamed of talking about money.

Saving Should Be a Family Affair

This social prescription entails that each member of the family should be engaged in the saving processes. Make a family saving goal, for instance, saving for a holiday, and ensure that the kids know that the whole idea is to save money for the holiday. This not only has several implications on the attitude of the child towards saving but also builds trust and management between him or her and other people.

Practical Applications

Piggy Banks and Savings Accounts

Piggy banks and savings accounts are familiar objects for children and adults, respectively, that help save money. For younger children, an initial step would be to use a piggy bank to save money. As they gain adulthood, open a savings account in their names. This helps them learn about banking and also inculcates the culture of saving from a formal point of view.

Games and Simulations

Foster the development of games and simulation exercises to help impart financial knowledge. Parents can comfortably allow their children to play online games and board games as some of them help in the learning of how to manage money. They can be useful to explain certain lessons in a way that is easy to understand and actually experience what was taught.

Encourage Charity

It is good to teach a child to save, but equally good is teaching him or her to share. Explain to them that they should put some part of their allowance in charity. This creates empathy and social responsibility in them, as well as increases their consciousness of people’s needs and the need to assist them.

Celebrate Achievements

Congratulate the child every time he or she is able to save something big or small. Praise and motivate them to keep saving so that they can be successful. Praise them for their work and talk about how their money is increasing for the intended purpose.

Learning Through Real-Life Experiences

Shopping Trips

Please encourage your child to accompany you on shopping trips and explain to him or her how and where to compare prices, look for discounts, and make wise purchasing decisions. Define the difference between needs and wants, and engage in the process of making frugal decisions.

Allowance Management

Set a reasonable figure and give your child a fixed amount of money. Teach them how to budget it. Assist them in realizing that it is possible to save a part, spend the other part wisely, and set aside for future use. This way, they can gain the elementary learnings of personal finance and money management by engaging in the actual process of paying and being paid.


One of the greatest and most helpful skills that any parent can teach is the skill of saving money to their children. This means that, through arranging fun activities, practical applications, and consistently teaching lessons that promote good money habits, one is capable of establishing proper financial habits from the get-go. The essence here is to turn saving into an entertaining process so that the child would learn the necessity of money and how to plan for the future. By using these strategies, you can ensure your child a financially secure life in the future.

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