How To Teach Children The Culture Of Saving.

Nowadays there is a big number of adults suffering the consequences of not having proper financial education. Debts are bigger than expected, paying interests and taxes is a big concern, savings for retirement are an unreachable dream, and so on.

If you have experienced a similar story and you have children, it’s now the moment to realize that you can make a difference for the future: You can teach your child how to appropriately spend money, how to make a budget, how to save, and many other financial activities that could assure economic stability during adulthood.

Children repeat most of the action they see at home; they learn most of their behaviors by imitating. Therefore, everything you want your child to do, you will have to do it first, you will have to teach by example.

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Communication is always the key.

In most of the cases, kids have a hard time trying to understand grownups issues. Picture this: You tell your 4 years old you have no money to buy that ice cream or that new superhero toy he really wants; but, he knows there’s a machine where you go, enter your card, push some bottoms, and voilà, there’s some cash. How is it, then, that you are saying there’s no money? You just have to go to that machine…

Communication is the key to help your children understand how money issues work. Talk to them and explain what money is, what you must do to gain it and which is your criteria to spend it. Instead of saying “There’s no money for that toy,” try something like “The money I have I would rather spend it buying cookies for your school snacks,” or something more appealing for them: “I’m saving to buy you a nice birthday present.”

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“Children repeat most of the action they see at home; they learn most of their behaviors by imitating. Therefore, everything you want your child to do, you will have to do it first, you will have to teach by example.”

Learning to save with fun activities.

When teaching children, it is very important to consider that deep explanations may not be as effective as we would like them to be. Therefore, when introducing some abstract concepts, such as saving money, it would be more appropriate to do some fun activities that help the kid understand how the process actually works.

Make a saving jar.

Identify together with your kid a saving goal, label a jar (e.g.: “Savings for new video game”) and put it in a place where you kid can see it every day. Explain that every week he/she will have to put money in that jar until reaching the amount needed to acquirer the goal.

Make a timeline on a board.

After having identified which is the saving goal, talk to you kid about the time he/she will need to save the money. Consider if he/she will, for example, save the full percentage of the allowance or only a part. Let the kid make the decision but guide him/her by explaining all the possibilities. Draw on the board the number of weeks needed and make your kid put a mark every time he/she puts the money in the piggy bank or jar.

Become part of the game.

As it has been said before, children learn through imitation; watching you doing the same activity he/she is doing, can be a great motivation. Set yourself a goal (it should be a very affordable one, such as a book or a new dress), put your own saving jar next to his/hers, and week by week start saving the money you need to achieve your aim. Besides being an inspiration to your kid, this activity can also develop the sense of healthy competition.

Treat your children for saving.

A great motivation to continue with an activity can be receiving a reward. Telling your kid you will give him/her a candy every time he/she puts money in the jar, or saying he/she will have to save only the 70% of the amount because you will complete it can be a good strategy to encourage saving.


For all these activities to be more effective, parents must identify the appropriate moment to introduce the concept of saving. When kids ask you to buy them some toy, instead of saying “We can’t afford it right now”, try something like “If you want it, you can save to buy it. When we get home, I will give you a piggy bank so you start collecting the money.” Another appropriate moment to make a saving plan or guiding your children to consider how to spend their money is when they receive it as a gift on Holidays or their birthdays.

These situations put children in context, therefore, concepts such as saving or identifying how to appropriately spend the money will be less abstract.