Teaching Kids to Save Money: Fun, Real-Life Lessons Every Parent Should Try

Saving money is a crucial skill that you should impart to your kids, particularly now, where social media promotes instant gratification. Saving involves setting money aside for a specific goal or having a backup of funds in case of an emergency. 

Teaching your kids about saving will benefit them in many ways, like enabling a sense of financial responsibility and helping them understand their financial limits. It also promotes delayed gratification, where they learn to wait for better rewards.

Leading your kids through finances can be challenging, but it is something you must do to brace them up for adulthood. For your convenience, we show you how to teach kids the value of saving money as part of their home monetary literacy classes.

1. Start with the Fundamentals of Saving- What Is Saving?

Introduce your young one to savings by introducing the basics. It might be among their first money lessons so they are possibly green to several terms and concepts. 

Use simple language to explain saving money, letting them know that they put aside a chunk of money given to them. 

An example you can tell your child about saving.

"Let’s say you get $1. If you spend all of it on sweets, you won’t have any left. But if you save 50 shillings and spend only half of it, you’ll still have money to buy a toy later or something even better."

Your kids should know that the funds they set aside are still theirs and it grows every time they put in more. 

2. Use Visuals

Visualizing the topic will make it easy for your kids to understand what you are talking about. Use a clear jar for starters to hold their money. The clear jar allows them to watch their money grow each time they drop a coin or a note. 

You may also use a colorful chart to explain how savings work. For young kids, you rely more on drawings than words for easy comprehension.

3. Bring Games into the Mix

Financial lessons can be boring, even to adults. Change the learning atmosphere by using games, which will lighten the mood and grab your young ones’ attention. The games should be appropriate for their age, that is, don’t rely on slightly complex games like Monopoly for toddlers.

Games that can teach your kids about savings include Hit the Road, termed the new-age Oregon Trail, and The Game of Life. Older kids can enjoy Monopoly, The Bean Game, and the Penny Game. 

The Penny Game is an excellent way to introduce compound interest. You start by giving each child a penny and doubling it every day, provided they save it.

4. Guide Them in Setting A Goal

Savings go hand-in-hand with setting targets, an area that you can guide your child during their home classes. Many times, people save with a particular goal in mind, like getting something they fancy. Others do it to reach a certain monetary limit. 

Setting targets is important, as it encourages hard work and dedication. When guiding your kid in setting a savings goal, let them tell you what they want to get. You then put money aside for the item and monitor the progress together.

5. Lead the Way

Kids learn from us and we must always strive to set a good example to instill virtues in them. Banking on this, you can lead by example in saving and let them follow suit. Have a separate jar next to your kid’s where you put money. They will start following your cue and get the motivation to save.

You must exercise full discipline by not taking money off the jar before meeting your targets. 

6. Motivate Them

You should motivate your kids to get them more into saving. Setting funds aside is a long process, and kids can get bored along the way. You can lift them from boredom by setting regular milestones and celebrating them together.

For instance, if your kid wants to save $200 for a toy, set $20 milestones, where you reward them for their resiliency until they reach their target. You can add on to their savings or gift them in other ways they may love.

7. Make Saving a Household Habit

Another excellent way of teaching kids the value of saving is by making it a household habit. With everyone around your young ones keeping money aside, they will pick up the habit as a standard expectation. 

Come up with other ways to save money like using a swear jar and a rewards jar to teach them that saving is a necessity at home.

Winding Up

Keeping some funds aside is an essential part of financial literacy that you should introduce to your children. This piece looks at how to teach kids the value of saving money, with key highlights being leading by example and making the lessons fun through games and motivation.

Stamp it as a habit from when they are young, and guide them in setting goals to foster financial discipline. As you lead your kids through this monetary skill, be consistent and transparent to make it easier for their comprehension and application.