Learning about saving money as a kid is a crucial life skill. Young people who are encouraged to save are much more likely to be savers in adulthood, according to our Youth Economy Report. So, it's never too early for kids to start learning about the importance of saving. According to a study by the Money Advice Service, money habits are set by the age of seven. Teaching kids how to save and the benefits of putting money aside can help them ensure healthy financial adulthood. But once you've got your child saving up their money, what should they spend it on? If you are looking for some ideas of worthwhile things your child can save up for, you're in the right place.
What do kids typically save up their money for?
Depending on their age and interests, different kids will want to save up for different things. Younger children will often spend their money on things like stickers, small toys or sweets. Older children and young teenagers are more likely to want to save up for clothes, online games and apps, books, magazines and outings with friends. They may also save money for bigger items like a new bike or games console. The older children get, the more expensive the items they are saving for usually become, with stickers and magazines eventually being replaced with driving lessons, a car, university fees or a flat deposit.
Why does it matter what you spend your money on?
Giving your children pocket money helps them learn about the value of money, and with their own prepaid debit card, they can learn how to spend their money responsibly. However, kids are still young and will likely make a few mistakes. However, while making these small financial mistakes can help them avoid bigger ones as they get older, they still need to learn about responsible spending and not waste their hard-earned money or spend beyond their means. You can help your kids avoid serious money mistakes by utilising GoHenry's spending controls and monitoring your kid's spending through the parent app. By understanding the importance of spending wisely in childhood, your child will be better prepared to handle financial responsibility in adulthood.
What to think about when saving up for things
There's more to saving up than many young people probably realise. While having a savings goal and getting into the habit of regularly setting money aside is, of course, a good thing, they also need to consider some important points.
Their wants versus needs
When kids are learning about saving, they need to be able to distinguish between wants and needs. It's important to understand that needs include necessary items like food and shelter. These must be taken care of before their wants: nice extras like sweets, magazines and toys.
How long they'll need to save for
Depending on what they want to save for and how much it costs, they'll need to consider how long it will take them to save the money. This can also help them decide how much money to put into their savings. If they want the item sooner, they'll need to think about whether they can set aside more towards it.
Their other money financial responsibilities
Do they have other money responsibilities? Do they need to contribute to their living costs at home? Or are they looking to save for other things, such as paying for driving lessons or university fees? These items may have to take priority.
Where to put their savings
Your child or teen will need somewhere to put the cash that they are saving. For very young children, this might be a piggy bank. For kids aged six and over, you might want to consider setting them up with an account with GoHenry where they can safely stash their savings and set up savings goals.
Parental permission
Most kids will need the green light from you to buy the item they are saving for, especially if it's particularly expensive. Otherwise, they could end up very disappointed if, after saving up for months, they discover that they're not allowed to buy it.
20 Short-term saving ideas
- Clothes
- Footwear
- LEGO sets
- Bike
- Smartwatch
- Books and magazines
- Holiday spending money
- Console games
- Entertainment subscription services
- Hobby lessons (singing, musical instrument, horse riding, sports etc.)
- Music downloads
- Going out with friends
- Birthday and Christmas presents
- Prom outfit
- Concert tickets
- Watching sports
- Musical instruments and accessories
- Charity donations
- Hairdresser
- Beauty treatments
20 Long-term saving ideas
- Driving lessons
- First car
- Car insurance, tax and servicing
- University fees
- Living expenses at university
- University books, equipment and resources
- Tutoring
- Moving out of home costs
- Deposit for their first flat
- Furniture and accessories
- Games console
- Mobile phone
- Laptop or tablet
- Television
- Travelling abroad
- Job interview clothes
- Gym membership
- Investments
- An emergency fund
- Retirement fund (it’s never too early to start thinking about it)
How to teach your kid about budgeting and saving
GoHenry makes teaching young people about budgeting and saving easy and fun. Our in-app Money Missions covers all the important money basics, from spending and saving to investing, borrowing and giving. Your child can watch fun videos, take quizzes and earn points and badges as they develop their money-managing skills. The bite-sized lessons are tailored to your child's age and understanding and will help them learn all about money planning and budgets and how to develop good savings habits.
You can also use the GoHenry parent app to monitor your child's spending, track their saving progress and pay them pocket money for completing tasks. Kick-start your child's financial education and apply for a GoHenry account today.
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