"Look after the pennies, and the pounds look after themselves" is a well-known saying. It means if you take care not to waste small amounts of money, you'll be able to accumulate larger amounts. With this in mind, here's how to show kids the value of pennies and how quickly money can grow when you start saving.
What is the penny savings challenge?
The penny savings challenge is a popular way to encourage children to save money. It involves saving a penny on day one, two pennies on day two, and so on, increasing the amount you save by one penny each day. By the end of the year, you will have saved £667.95.
The challenge is a great way to teach kids about the power of compound interest. It can also be a fun and rewarding way for kids to save money and reach their financial goals. It shows them that with a little effort, they can achieve anything!
Penny savings challenge variations
You can try a range of penny-saving challenges; some work better for younger children and some for teens. Whatever challenge you choose, the most important thing is to set a realistic goal and help your child stick to it. Here's what to try:
The 1p challenge: This is a simple challenge for very young kids where they save 1p every day in a jar. By the end of the year they will have saved £3.65. Not a huge amount but the visual representation in a jar can help them to see how fast money adds up.
The 1p increasing challenge. Your child starts by saving 1p on 1 January, then 2p on 2 January, then 3p on 3 January and so on, saving what you saved the day before, plus a penny more each day. If they started on 1 January 2023, then by 31 December 2023 they’ll have saved a grand total of £667.95.
Double Trouble Penny Challenge. Is your child looking for big savings? If so you may want to consider the double trouble version of the challenge. This is the same as the regular challenge except you double the amount for each day. At the end of 365 days you’ll have saved £1335.90.
The round-up challenge involves rounding up your everyday purchases to the nearest pound and saving the difference. For example, if your child buys a drink for 99p, they would put 1p into savings. If they buy a toy for £2,89 they would put 11p in savings and so on.
The creative challenge involves your child finding a way to save money. You could start a lemonade stand, sell old toys, or do chores for neighbours.
Spare change family jar challenge
For children who get bored fast or children who don't yet get a large sum of pocket money, inspire them with the spare change family jar challenge:
This challenge gets everyone in the house involved. Your child must collect everyone's spare change daily and put it in a jar.
Everyone has to contribute, whether it's a penny or 99p.
Encourage your child to count the money at the end of the week and then the end of the month to see how easy it is to save money and watch it grow.
At the end of a set period of time, the collected money can be used for a family treat.
Tips for helping your child complete the penny savings challenge
Do the challenge with your child. This can help motivate them to keep going and make them feel it's a competition between you.
Make it easy for them. Money challenges work best when they are easy to do. So make sure you have lots of spare change so your child can save the required daily amount.
Remind them regularly. A visual representation such as a money jar in the kitchen or their bedroom can help remind them to keep going.
Make it fun and exciting. The challenge should be something your child is excited about and motivated to do, so ensure it's fun by having a jar you fill with money or an online account that shows money accumulating.
Set realistic goals. Don't set a plan that is too difficult for your child to achieve, as they will be more likely to give up.
Celebrate all successes. When your kids reach a goal, manage the challenge for a week, save enough for a treat and be sure to celebrate it.
The benefits your child can get from the penny savings challenge
It will help your child learn the value of money
It will teach them about saving
The penny savings challenge is a great way to teach your child about the importance of saving money. It can help them understand how easy saving is and how savings grow over time.
It will help them develop good financial habits
The penny savings challenge can help your child develop good financial habits, such as delayed gratification and budgeting. It can also help them learn how to set and achieve financial goals.
It will teach them about compound interest
The penny savings challenge is a great way to teach your child about compound interest. Compound interest is the interest that you earn on your interest. It can help your child's savings grow exponentially over time.
How can your child try the penny savings challenge with GoHenry?
GoHenry's mission is to make every kid smart with money thanks to a range of great features that help kids safely and securely learn about money, from saving to smart spending. In-app Money Missions makes learning about money fun and engaging with videos and quizzes covering everything from the value of money to budgeting. Parents can support their kids through the GoHenry app by setting flexible parental controls and receiving real-time spending alerts whenever they use their GoHenry prepaid kids debit card.