How to Get Kids Saving Money

- Saving money is a crucial life skill, but not one that comes easily
- Financial literacy is not taught in our school systems today, and what little is discussed does not go to the extend that is needed
- 54% of American adults live paycheck to paycheck, with little to no savings – it’s time to change this generational curse
- It’s vital to teach savings habits early so they will continue into adulthood

1. DISCUSS NEEDS VS. WANTS
- Needs (Basics) – food, shelter, basic clothing, basic transportation, healthcare, education
- Wants (Extras) – movie tickets, candy, designer jeans and sneakers, smartphones, video games, etc.
- Be specific – designer jeans vs. regular jeans
- This allows you to explain the importance of prioritizing spending, leaving money for future necessities

LET’S PLAY A GAME
- Try quizzing your kids by pointing to items around the house and asking them if they are a NEED or a WANT
- This can also be done in department stores or the grocery store
- Make it an ongoing game
- AND don’t forget the conversation

2. LET KIDS EARN THEIR OWN MONEY
- In order to learn how to save & manage money, you have to have money
- Just “giving” money to kids will not teach them anything
- It’s important that kids EARN their own money
- Should you pay for chores? – It’s ok to pay for chores, but not all. Be sure your child is doing things around the house that they are not being paid for. This is their contribution to the family. Everyone doesn’t something for the family.
- Get creative with other ways to earn money

KID JOBS FOR YOUNGER AGES
- Picking up after dogs, dog walker, pet sitting, dog wash
- House sitter, babysitter
- Bake sale, lemonade stand, create a product to sell
- Car wash
- Sell unwanted items – shows kids that these items do still have value
- Tutor, coach, referee assistant

3. SET SAVINGS GOALS
- Just telling a child to save money, without an explanation, will seem pointless to them
- Help your child define a goal, or multiple goals (depending on age)
- Once they have their goal, have them write it down where they can see it
- Then help them break it down into bite size pieces, this will help with the success rate

HOW TO HELP KIDS SET GOALS
- Identify Goal
- Visualize the Result
- Make a Plan – S.M.A.R.T. Goal (Specific, Measurable, Achievable, Relevant, Time-Bound)
- Identify their Motivation
- Overcome Obstacles
- Find a way to Support
- Create Accountability

4. GIVE THEM A PLACE TO SAVE
- When kids have a savings goal in mind, they need a place to stash their cash
- Younger kids: piggy bank, jar system, envelopes, etc. – make these items clear so that they can SEE the money growing (getting higher). This is important at the younger ages.
- Older kids: it’s time to introduce them to the bank

5. HAVE THEM TRACK SPENDING
- Being a better saver means knowing where your money is going
- This is easily done with a bank account statement or debit card
- Create a manual system when they are younger, it doesn’t have to be complicated
- There are several apps that can track spending, but do your homework (they can have expensive fees)

6. OFFER SAVINGS INCENTIVES
- Do you like incentives? – So do kids!
- Afterall … who doesn’t like FREE MONEY!!!
- This can also be a great strategy if you are having problems getting your kids to start saving or they are saving for something bigger (i.e. $400 tablet)
- You can offer to match once they hit a certain percentage
- You could offer a reward once they hit a savings milestone (halfway, etc.)

7. LET THEM MAKE MISTAKES
- This is a tough one for parents, but essential to the process
- Part of putting kids in control of their own money is so they make mistakes now
- You will want to step in when you see a costly mistake about to happen, but make it a teachable moment instead
- It will be cheaper now than later

8. ACT AS THEIR CREDITOR
- We want kids to learn to NOT live beyond their means
- They need to understand that not being patient will cost them more
- Let’s say they want to purchase something that is $100 and they just can’t wait
- Suggest that you can “lend” them the money, but with interest
- If they can wait and save the money, it will cost less – delayed gratification
- Don’t do this all the time, but try it a few times so that they can see how much extra money it will cost to not wait! Be sure to keep track on paper so they can see it.

9. TALK ABOUT MONEY
- A 2021 T. Rowe Price survey said 41% of parents don’t like to talk to their kids about money
- We know financial literacy is not taught in schools
- If you don’t talk about money, how will they learn
- By age 3, kids understand basic money concepts
- By age 7, many money habits have already been set

TIPS FOR TALKING TO YOUR KIDS ABOUT MONEY
- Start early & and talk often – this is not a one-time conversation
- Be honest about your own money mistakes, past & current
- Talk values, not figures – your kids don’t need to know how much money you make
- Let them be a part of the family money/budget conversation
- Learn about money together

10. BE A GOOD EXAMPLE
- That’s right … lead by example
- You can teach your kids something, but if they see you do something else, that is what they are learning
- If you want to teach them to save, show them how you are saving & why you are saving
- If you are not saving, it’s never too late to start
- Let kids be a part of the family money conversation
If you want more information on how to talk to your kids about money, check out our Money, Mommy & Me events each month. This is a conversation meant to help parents talk to their kids about money and learn about a way of saving for college that may be new to you. Click the link below to check out dates and times of all of our events. We hope to see you there!