5 Tips to teach your kids about saving

The Connector
12 September 2022
3 min read

Many adults agree that personal finance should be a subject taught in school. Managing your finances is a crucial life skill but it doesn’t come naturally. Without help, many of us live from one salary to the next and don’t know how to effectively save or invest.

If we can teach our children money lessons while they are young, we can set them up for lifelong financial wellbeing. For example, learning about delayed gratification helps avoid unnecessary spending and appreciating the value of money. If we want the lessons to be understood, the money experts recommend that we keep the lessons simple.

  • Wants and needs

The first step in teaching the value of saving is to help your child understand the difference between “wants” and “needs”. “Needs” include food, a roof over your head, clothing, health care and education. “Wants” are the “nice to have extras”. Discuss how needs should be prioritised over wants, and that it’s important to have money set aside for future needs.

  • Earning their own money

Allowing your children to earn money helps them understand the value of money and gives them the opportunity to learn how to use it. Some children thrive when they are encouraged to sell goods and others may need to sell their services to you in exchange for an “allowance” or pocket money.

  • Help set savings goals

It’s hard to understand why we would want to save if there isn’t a goal. Help your child set a savings goal, to motivate them to start saving. Once they have a goal, help them understand how long they need to save for to achieve that goal.

  • Where to save

It helps if children can visualise their money accumulating. Younger children may appreciate seeing physical cash being saved in an appropriate place while older children enjoy watching their balance grow in a savings account. Many of the banks have child-friendly saving accounts with mobile apps to help kids track their savings.

  • Track spending

Older children will be able to write down when they spend money and what they spent it on. Adding up the purchases is an important way to understand what money is being used for, and how this affects the savings goal.

In many families, even financially literate families, money matters aren’t always discussed openly with children. If you want your children to learn good money habits for when they are older, ongoing conversations about saving and spending can help encourage a healthy attitude to money.

Teaching your children about saving equips them with knowledge that will benefit them throughout their lifetime.


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