Teaching your children how to save money from an early age is one of the best things you can do for their future. Saving money isn’t always easy but getting into good money habits early on can help.
The question is, how can you teach kids to save? Here, we reveal 6 ways to teach your kids good money-saving habits.
When to start talking about saving habits
Ideally, children should be taught about money from as early as age 3. However, young children won’t necessarily understand the concept of saving.
By the age of 6, children are typically ready to start receiving pocket money. This teaches them to exchange money for goods, as well as the value of money. It also gives you the opportunity to introduce the concept of saving to your child.
Stick to teaching the very basics when your child is 5 to 6 years old. By the time they are 7, they will have a much better understanding of the value of money and how it only goes so far. You can start teaching them to save a portion of their pocket money for the things they want but can’t currently afford.
Tips to teach your kids money-saving habits
There are a lot of ways to teach your kids about money and money-saving habits that will stick with them throughout adulthood. Let’s look at some of the best tips you can follow…
1. Wants vs needs
One of the first lessons you can teach your children is to separate what they want vs what they need. Explain how you need to prioritise the things that you need over the things you want.
Remember, children learn how to behave by watching their parents. So, if you want them to start prioritising the things that they need over things they want, you’re going to need to lead by example. For example, parents can model good money management by showing how they've saved for certain special purchases.
2. Introduce pocket money
Pocket money is one of the best ways to introduce children to money. They can use it to:
- Buy the things they want and need
- Learn how to budget
- Begin to understand how to be financially independent
When you give your children pocket money, encourage them to set aside a small amount to save towards something they want or need. For younger children, set small savings goals, so they don’t need to wait long for the reward. As they get older, you can set larger savings goals accordingly.
3. Money Missions
Did you know we offer fun, educational Money Missions through our app? Our Money Missions teach children what saving is, how it works, and how they can save money. They are tested on the knowledge they have learnt with interactive quizzes.
4. Set saving goals and motivation
It can be difficult to save money at any age. There is always something we can spend our money on and being disciplined enough to save is hard work. However, setting savings goals can help to provide children with the motivation they need to save.
Make sure the goals you set are small and easy to achieve. For example, one goal could be to save £5. Children can track their savings against savings goals within the GoHenry app. This will help to boost their motivation to save money.
5. Lead by example
Do you have good saving habits yourself? Leading by example is the best way to pass on good saving habits to your children. Showing your kids how you budget your income and outgoings each month can help them to understand just how important budgeting is to life. You can also let them see how you save for larger, more expensive items — a kitchen remodel, a new boiler, a holiday. By doing so, there is a great chance that they will learn from the example you are setting.
6. Let them track progress with GoHenry
Another way to teach children good money-saving habits is to talk about money and progress. How can it help in life if you are good with money management? Explain why it is important to track progress with budgeting and saving, and how it can directly impact life in terms of the day-to-day running of the house, special occasions and big family treats. Children can learn the value of money and the importance of saving for the things they want.
Tracking your spending helps to develop financial education. Often, we don’t think about what we are spending. Without tracking it, it is easy to overspend or waste money on the things we don’t necessarily need. Teaching your children to track their spending habits will help them to become more aware of what they are spending.
One way to help your children track their spending is through our monthly membership. For just £2.99 a month, you can pay your child's pocket money onto their GoHenry prepaid debit card and track their spending habits through our convenient app. It also comes with parental controls, savings goals, and the option to set up ApplePay for older children.