Money Management – Encouraging Children to Save

We were discussing the need for money management the other day, when Karen, one of the best savers in our office, told us a very revealing story about her childhood.

We were quizzing her on whether coming originally from a small town was part of the reason she was so good at saving money.

“No, it was having a banker for a Mother”, she informed us.

We laughed, but she went on to explain. When she was a child, it was automatically expected that she would put 50% of her allowance (which was earned by doing chores) into savings. This was a fact of her life, and one that she did not question.

She then told us about when she was 12 years old. Her and her brother both wanted 10-speed bikes - so they decided to save up for them.

For a whole year, they both saved and did without – until finally they were close to their goals. Their Mother, as a reward for their hard work, put the last $20 towards their purchases.

We could imagine the joy and sense of achievement that 13-year-old Karen and her brother felt as they rode their 10-speed bikes. These children had learned the power that being a saver could bring.

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Two of the greatest skills that any parent can teach their children are the ability to save and to use their money wisely. These are not easy things to teach - especially if they are skills you are just now learning yourself. However, with persistence, you can do it.

Here are some useful guidelines for saving and teaching your children to save:

1. Save for a specific goal (one that is definite and realistic).


2. Be consistent and focused about setting aside money for the goal.


3. Keep track of how well you are doing.


4. Once you achieve your goal – be sure to enjoy the sense of accomplishment.

Some children will need more help on staying focused:

• Encourage them to start with a goal they truly want and that can be achieved in a few weeks.


• Depending on their age – you might want to help them draw a picture of their goal – and put it in a place that they can see it.


• Once again, depending on their age – encourage (or help) them to record each time they put money into savings. Show them how to track their savings and see how close they are to their goal.


• Praise their efforts.


• If they are unable to save one week, let them know it is not the end of the world, but that they need to get back into saving ASAP.


• Congratulate them when they achieve their savings goals. Let them know how proud you are of them.

There will be challenges – but learning how to focus and succeed at saving and money management - are some of the most empowering skills you will ever teach your children.