For most of us, spending is easier than saving. But getting into the habit of saving money can lead to a lifetime of financial independence.
As kids learn about money from a young age, understanding how to save and how to spend is a lesson well learned.
So, what can you do to help your kids develop a healthy relationship with money - and understand the difference between instant and delayed gratification? Teaching them how to save money is a great place to start.
Top ways to save money as a kid include:
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Make a habit of saving
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Set up saving goals
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Visually track savings progress
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Keep savings somewhere safe
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Earn pocket money from doing chores
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Keep track of what you spend
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Set daily/weekly spend caps
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Resist peer pressure
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Challenge your child to save more
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Get kids to find free things to do for fun
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Encourage kids to bring snacks and drinks from home
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Teach them to take less money when going places
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Motivate kids to earn more money
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Ask for things you want as presents
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Take care of your stuff
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Look for savings and discounts
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Switch to cheaper brands on the things you have to buy
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Find a savings buddy
1. Make a habit of saving
Children may struggle with saving all their pocket money, but it can be helpful to get into the habit of putting a little aside each week. Getting your child used to saving at least some of their pocket money is productive in several ways; it enables them to develop a habit of saving, and it teaches discipline and delayed gratification.
Children learn about money and its value in school, from as young as five, so once they are old enough to understand the value of money, they are old enough to know how it is used. Saving habits for younger kids can start with saving for a book or a small toy. Even these short-term saving habits will help build financial literacy.
As they grow up you can create savings for shorter and longer term goals, to help kids see that it’s important to save for a range of items.
Related: How to teach your child about saving money
2. Set up saving goals
Help your child establish a savings plan by working out how much money they have to start with, then the amount they need to save each week to reach the total and a timeline for how long it will take. Encourage them to be realistic about their goal as saving for something high value is not going to be achieved in weeks. Understanding that saving takes time can be a challenge, but it’s an important lesson to learn.
For example, if they want to buy a gaming console, their goal might be enough money to buy the console, plus controllers and any games they want to play..
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Even if their goal is just to save as much money as they can, it’s important to set milestone goals. For instance, you might set a goal that you'll reward them with an extra £10 every time they save £50.
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If possible, you could agree to match or support their savings or add a little bit of interest as their money grows, to give them a boost towards their goal.
Related: Good things to save up for as a kid
3. Visually track savings progress
Seeing is believing, so having a visual perception of savings progress will inspire your child to keep saving.
You could make a savings chart and stick it on a bedroom wall or the fridge. Let your child tick off and date each little chunk of money as it is put away.
You can also get them a prepaid kids’ debit card with an app. This allows them to set up savings goals, automate savings each week and track their spending and saving whenever they want.
4. Keep money somewhere safe
Talk to your kids about the importance of keeping their savings and money safe. If you give pocket money to your child in cash, this could be kept in a piggy bank, or money box. It's also a good idea to keep money out of sight, to reduce the temptation to spend.
You can also give pocket money via apps such as GoHenry, and set up a weekly pocket money transfer to their account. This way the money is safe and you and your child can see exactly how much they have saved, right down to the last penny.
5. Earn extra pocket money from doing chores
If you want to help your child save more, consider helping them earn more pocket money from extra chores. Not only does this teach them about earning but also about the value of money. According to The GoHenry Youth Economy Report, the UK’s top tasks completed by young earners are (plus a guide to the going rate):
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Tidy room - £1.03
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Brush teeth - £0.70
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Make bed - £0.81
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Homework - £1.18
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Get ready for school - £0.71
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Load/empty the dishwasher - £0.88
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Feed pets - £0.88
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Vacuuming - £1.20
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Put clothes away - £0.70
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Empty bins/recycling - £0.76
Remember chores and tasks that your child can complete will vary by age - older children could perhaps help with ironing or cooking, and younger children can lend a hand with hoovering or dusting.
6. Keep track of what you spend
You don't need to use a complicated budgeting app or spreadsheet to teach kids to keep track of their spend. A simple system like writing it down can be enough to get started.
A spending journal is another simple way for kids to track their spending. They simply write down what pocket money they have each week, what they buy, how much it cost, and what money they have left.
They can also use a budgeting app. There are many budgeting apps available that can help kids track their spending. These apps can be a great way for kids to see where their money is going and make changes to their spending habits.
With GoHenry, you can see where children spend their money with instant notifications. Equally, children can see their savings grow. Keeping track of what has been earned, spent and saved is an important habit, enabling children to learn how to keep on top of their money from a young age.
7. Set daily/weekly spend caps
If you're worried about your child overspending, set them a daily or weekly spend cap. This will help to limit their spending and prevent them from blowing all of their money at once. You could give them a certain amount of pocket money each week and suggest that they spend it on certain things. Or you could set a limit on how much they can spend each day. This will help them to learn how to manage their money wisely.
8. Resist peer pressure
One of the biggest money mistakes that children make is spending money to keep up with their friends. Peer pressure is a powerful thing, so it's important to teach your children to resist it. Explain to them that they don't need to spend money to be popular or cool and that they should only spend money on things that they really want or need. This will help them to make better financial decisions and save their money.
9. Challenge your child to save more
Most kids love a challenge, so challenge them to see how much they can save in a month by spending carefully. You could motivate them further by saving you’ll match any savings they make by month end. This is a good way to get them thinking positively about their spending and savings.
10. Get kids to find free things to do for fun
Another great challenge especially in the holidays is to get your kids to see if they can find 10 things you can all do for free. This gets them thinking of different kinds of activities and days out, not just the ones that cost money.
11. Encourage them to bring snacks and drinks from home
Kids love eating out but show them how much they can save by bringing food from home, including snacks and drinks. Emphasise that the more they save on eating out, the more money they will have for other items they want and need so it pays to be thrifty.
12. Teach them to take less money when going places
Another way to limit overspending is to instil the importance of a budget in them every time they go out. Set a limit for spending, by ensuring they only take a set amount out with them, and or get them to agree they will only spend a certain amount. This helps them to think carefully about their spending choices, knowing they have limited funds.
Related: Teaching budgeting to kids
13. Earn more money
Our data shows that GoHenry kids in the UK earned a total of £148 million in 2021. This represents a 9% increase in earnings per child since 2020, which is more than double the average weekly wage growth for adults.
However, this increase isn’t a result of handouts from parents and grandparents. Up to half of young people no longer receive weekly pocket money without being expected to complete tasks in return, and 34% have a part-time job of some description.
14. Ask for things as presents
Encouraging your kids to ask for things they want as presents is a good way to teach them to save money and delay gratification. It not only helps kids to understand that waiting for certain times of the year like Christmas, and birthdays helps them to save money but also that they are able to wait for those bigger ticket items.
15. Take care of your stuff
Teach your kids that all things have value so they need to take care of their clothes, home and possessions. This is an important lesson because it helps them to realise that taking care of their things will help to save money in the long run, as it means they are less likely to have to replace them.
16. Look for savings and discounts when shopping
Get kids used to being smart shoppers and looking for savings and discounts and always price-checking before they hand over their money. If they are buying online, suggest they also factor in free delivery and returns to help them save even more money.
17. Switch to cheaper brands on the things you have to buy
From deodorant to shower gel, and even the socks you choose to buy, switching to an own brand or a cheaper brand will always save you money. If your child is hesitant to switch brands, offer to help them find the cheaper brand. This will show them that they can still get what they want without spending as much money.
18. Find a savings buddy
Saving money is more fun when you're doing it with someone else. Get your child to find a friend or family member who is also working to save money and get them to work together to reach their goals. A savings buddy can also help with accountability. When you have someone else who is aware of your savings goals, it can be more difficult to give up on them. Your savings buddy can help you stay on track by checking in with you regularly and offering support.
How can GoHenry help
GoHenry is a prepaid debit card and app designed for kids and teens aged 6-18. They can use the card online or in-store and set automatic savings goals. GoHenry comes with a companion app for parents, which you can use to transfer money, set spending limits and get real-time updates whenever your child makes a purchase. So while your child learns financial responsibility, you get peace of mind.
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