Teach Your Child to Save at Any Age

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    • FNBO

      Dec 01 2018

Article | Read time: 2.5 minutes


Teaching children about saving and spending wisely is one of the most important jobs a parent has. Not only does it instill good financial habits that will carry on into adulthood, there are numerous lifelong lessons that can be learned through the concept of saving: hard work pays off; the value of delayed gratification; setting priorities; making choices; budgeting; and achieving goals.

It’s never too early to start teaching your child the value of saving and smart spending. These simple savings tips by age group will help your child learn the basic skills they need for future financial wellness.

2-4 Years Old
It may be too soon to discuss abstract financial topics but this is a great time to start practicing financial skills such as earning rewards for good behavior, counting, and waiting for something they want. Give your child a coin to place in his or her piggy bank (with adult supervision) as a reward for positive behaviors such as putting away toys after playing with them. Periodically, empty the bank to count the coins with them to demonstrate how their hard work pays off over time. Introduce the idea of commerce by turning in a certain number of coins for a certain reward. For example, 10 coins equal a trip to the park.

5-8 Years Old
With this age group, you can introduce the concept of earning and saving money from activities such as household chores, lemonade stands, birthday gifts, etc. Have your child keep their earnings in their piggy bank or savings account and celebrate every time they make a deposit. Instill the feeling that saving is a good thing because it will help them get something bigger in the future. If they choose to spend some of their hard earned money, teach them about making choices with their money. You can’t buy everything you want so if we buy a new doll today, you can’t buy new coloring books tomorrow.

Ages 9-12 Years Old
The tween years are a good time to start talking about some of the bills we pay as adults and how they relate to ‘needs’ vs. ‘wants.’ For example, mom and dad have to buy groceries for the family which is a ‘need.’ If we spend all our money on all the latest toys which are a ‘want’, we won’t have enough money to buy food and we will be hungry. This is also the perfect time to start talking about budgets. Explain that you can’t spend more than you earn in a given time period and that the money you earn must pay for ‘needs’ first (food, shelter, utilities, etc.). After you have paid for all of your ‘needs’ you can then decide how much to save and spend on ‘wants’ with what is left over.

Ages 13+
This is an ideal time to start encouraging a part-time job outside the home to earn more money and learn responsibility through activities such as babysitting, walking dogs for neighbors, or working as a grocery store carryout. Earning larger amounts of money sets the stage for saving for bigger ticket items such as a cell phone, computer, car, etc. Start encouraging your teen to save for these bigger ticket items to help them gain an appreciation for the hard work that goes into purchasing them. This is also an ideal time to introduce the concept of sharing some of our hard-earned money with others by giving to a charity or purchasing special gifts for friends and loved ones. Work with your teen to determine an amount to set aside from their earnings in order to share with others while still setting aside enough for saving and spending.

No matter what your age or stage in life, we keep saving simple with our savings accounts. A Personal Banker can assist you or your child in setting up a checking account, or savings account. Call a branch today!

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The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.