7 Good Money-Saving Habits to Teach Your Kids

Saving is an important aspect of human life, and starting young is the key to an effective adulthood. Developing good financial habits early on can set children on a path to financial stability and independence.

In this blog, we’ll explore seven practical and effective money-saving habits that you can instil in your kids.

How to Develop Good Money-Saving Habits in Your Child

Teaching your kids to save money does not depend on their age. In fact, the earlier you start developing this habit in your kid, the better it is for them. But how to get started?

Read seven ways in which you can develop good money-saving habits in your kids and make them fun!

1. Get Started with a Piggy Bank

Whether a piggy bank was a part of your childhood or not, they are undeniably a great and one of the simplest ways to introduce a money-saving mindset in your child from a young age.

Give them a piggy bank and tell them their goal is to fill it with coins and cash until no space is left. Teach them the importance of saving through this by telling them to save some money from their pocket money or anything they earned.

2. Choose Saving Jars with Goals

When your children are eager to get the newest toy, tell them they need to save up for it. Provide them with a jar for each item they want and give them a weekly allowance in small denominations to promote saving.

But simply telling them to save money without explaining the reason can seem meaningless. Instead, guiding them to set specific savings goals can be more motivating. Once they have a clear idea of what they are saving for, assist them in breaking down their goals into achievable steps.

3. Open a Bank Account for Them

While a piggy bank is a great option for your child just beginning their savings journey, the next step is to open a bank account to store their savings.

But if your child still hasn’t collected much money for a savings account?

Don't worry! There's a special type of account called a zero-balance savings account, ideal for young savers. These accounts allow your child to have a genuine bank account experience, similar to adults, using their piggy bank savings. They'll be able to see their money deposited at the bank, and you can explain the concept of interest to them – demonstrating how their money can gradually increase over time! It's beneficial for both parties. Your child will take pride in their savings, and you'll be instilling a valuable lifelong habit.

4. Allow Them to Earn on Their Own

Providing your child with a weekly or monthly allowance is great, but allowing them to earn their own money is better. It teaches them a valuable life lesson, helping them become more self-sufficient, resourceful in their funds, and independent from a young age.

If you have young kids, you can reward them in the form of money when they complete a household chore. If you have a teenage child, you can encourage them to take a part-time job to fund their additional expenses like shopping or leisure activities. This way, you prepare them for the real world and make them more independent while also instilling the habit of saving money since they can have their own financial freedom.

5. Make Use of Board Games

Teaching your child financial skills is an incredibly valuable gift. A fun and engaging method to achieve this is by giving them a board game like Monopoly. This game teaches them important concepts such as wise spending, property investment, earning rental income, saving, and paying taxes. Additionally, playing the game together provides an opportunity for quality bonding time.

6. Go for Shopping with Them

While saving is a great habit to form, teaching your child the importance of not splurging unnecessarily is also part of the process and an extremely important task. The best way to teach them this lesson is by taking them shopping with you. This will help them understand the value of money. Additionally, setting a budget and allowing them to choose what to buy encourages them to consider their purchases carefully and select only what they truly desire.

7. Create a Timeline

A timeline allows a child to see their savings grow over time visually. This can be highly motivating as it makes the concept of saving tangible and encourages them to keep contributing to their savings. It can include specific savings goals at different points. For example, a child might aim to save a certain amount by their birthday or the end of the school year. These goals can be marked on the timeline, providing clear targets to work towards.

Further, using a timeline helps a child understand the importance of patience and delayed gratification. They learn that saving money takes time and that consistent, small contributions can accumulate into a larger sum.

Teach Them the Difference Between Wants and Needs

Lastly, it’s important to clarify that needs encompass essential items like food, shelter, essential clothing, healthcare, and education. Wants, on the other hand, include additional items such as movie tickets, candy, designer shoes, a bicycle, or the latest smartphone. This way, they can understand what to spend their savings on and what items can wait to be purchased.