Healthy Saving Habits For Kids

Saving is a learned behavior. It’s something kids need to practice over and over from an early age.

When teaching your child how to save money, it is important to start early. I worked with a family whose 12-year-old son, Luke, decided he wanted to buy a car when he turned 16. I sat down with Luke and his parents to help them map out a realistic savings plan.

First, the family discussed how much a car costs and how much Luke would have to save. Then, we talked about how he earns money (such as birthdays, allowance, and odd jobs). We helped him determine how much of his money he would have to save, each month, to reach his goal.

To help provide a little incentive and support, Luke’s parents pledged to match .25 cents on every dollar he saved toward the purchase of a used car. They also helped him set up a savings account so that he could physically go to the bank, deposit the money, and track his progress.

By 16, Luke reached his goal of saving $5,000, and, combined with the money from his parents, he bought his first car. While the car was definitely a cause for celebration, the bigger accomplishment was that Luke learned how to save for a long-term goal. Those skills will benefit him for the rest of his life.

Here are 6 steps to help your children develop healthy savings habits:


Start Early

Learning to defer gratification, from an early age, will have huge implications later in life. The earlier your child understands this concept, the more time they will have to practice and experience just how great it is to reach their goals.

Link Saving to a Goal

It can be difficult for a child to understand the value of saving for an unknown. Which is why it is so important to help them set specific savings goals. Be it for an item they want now or for their college fund, which may be several years away. Help them learn how to patiently save for things by setting attainable short, mid and long-term goals.   

Create a Plan

It’s important for kids to have success by achieving their savings goal. So help them create a plan for saving. Talk about where their money comes from and how much of it they’ll need to set aside toward their goal.

Develop the Habit

Becoming a good saver is a learned behavior. It may start with a little bank at home, but as soon as you are able, it’s important to make the transition to a financial institution.

When you open an account for your child, make sure they come along for the ride. Over time, as they deposit money into their account, they will gain confidence by interacting with people who work at a bank.

Brainstorm Income Opportunities

Discuss with your child how they might generate additional income, and how that will help them reach their goal even faster.

Celebrate Their Success

Saving money takes patience and discipline. Learning to defer gratification to reach a short- or long-term goal will play a big part in their success. So celebrate with your child when they reach their goal.

Money Talks:  What is your earliest memory of saving money as a child? Share the story with your child or grandchild.

Gotta Have It Now:  51% of parents give their children allowance, but only 4% require them to deposit that money into a bank account.—

You must have Javascript enabled to use this form.

Newsletter Sign-up