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Beyond the Piggy Bank: Teaching Your Kids to Save

by admin

By: Anna Cohen

Parents are responsible for teaching their kids, well, pretty much everything. From good manners to the ABCs and all the way up to parallel parking, your kids will be looking at you for guidance and instruction.

But in between street smarts and book smarts, have you taught your kids to be money smart? If you haven’t been talking to your kids about money, it’s never too late to start. 

And as cute as that piggy bank may be, there are far more effective ways of teaching your kids to save.

Set Goals

It’s hard for little ones to save unless they have a reason. “Just because” isn’t going to grab your kids’ attention the way a new toy would. So help them figure out what it is they want, and how to save for it. If they want an $80 scooter before summer, help them calculate what percent of their $10 allowance they need to save each week. It’ll be easier for your kids to say no to distractions when they know what the rewards will be.

Use the Jar Method

Kids are very visual learners. Being able to actually see their savings piling up will encourage them to save more. A large, clear mason jar is perfect for this purpose. You can even use several mason jars, if they are saving for more than one thing: part of their allowance towards a new video game and part towards a new football. They can decide how much to put into each jar, depending on what they want more. This teaches them to save as well as how to prioritize their finances.

Give Them a Chance to Save

Your kids can’t save what they don’t have. The only way they’ll ever be able to save money is to actually have money for saving. It’s up to you whether that means giving them a weekly allowance, paying them for extra jobs (like weeding or washing the car), or both. When the holidays or birthdays roll around, consider giving your kids a less expensive gift but adding some cash in their birthday card. 

Match Their Savings

All the best companies have a matching 401(k), so why should your household be any different? Incentivize your kids’ savings by offering to match funds. If they have a big goal, for example, a new gaming system, you could offer to add in either a flat fee or a percentage to help them. You can also incentivize milestones, such as giving them a $50 bonus for every $300 they save on their own. 

Teach Them How to Track Money

Kids don’t always realize how quickly the little things add up. But a little toy here and an ice cream from the store there can derail all their savings. Buy them a notebook and teach them to write down every single penny they spend. It’s an eye-opening experience. Chances are, they’ll be surprised to find out how much they’ve been spending.

Work out a Budget

If your kid is old enough to learn about money, they’re old enough to learn how to budget. As they get older, your kids will have to make more complex financial decisions. Before you know it, saving for toy cars turns into having to decide between lunches with friends or taking someone on a date. Teach them how to budget at an early age so that they learn to prioritize where their money goes. 

Help Them Open an Account

Piggy banks and mason jars are great for younger kids, but tweens and teens need a bank account. Get them an account with a debit card so they can start learning how to budget, track expenses, and be responsible for their own finances. Learning to manage their money now, while they have you keeping an eye on them, will help prepare them for when they go off to college. 

Be a Creditor

Want to teach older kids the pain of credit cards and interest fees? Act as their personal credit card company by lending them money, then charging them interest. Ouch! There’s nothing worse than realizing they paid $125 for a $100 purchase. It’s a valuable lesson for them and will teach them to live within their means and avoid credit card debt.


One of the biggest favors you can do for your kids to teach them how to save and manage their money now, before they go off to college. They’ll thank you for it someday!