3 Tips to Teach Kids Why Saving for a Rainy Day is Important

3 Tips to Teach Kids Why Saving for a Rainy Day is Important

When people talk about emergency funds or rainy day savings, it's usually about setting aside some cash in case your roof leaks, or the brakes on your car need replacing. Things that kids don't typically think about.


However, teaching children to save money for the unexpected, beyond the cool new sneakers or video game they've been eyeing, is a great habit to develop. Here are three ways to help kids learn about the importance of saving for a rainy day.

1. Use real-world examples

Kids know all about saving up for a special toy or outfit (things they want), but have you ever had a discussion about how you pay for the things the family needs? And what happens when those needs come up unexpectedly?


Think about something that happened in your household recently to bring up this discussion, whether it's the time your daughter broke her arm, or when the washing machine stopped working. If you had to rely on a credit card or take out a loan to pay for an emergency expense, pull up the statements and explain how paying that over time actually costs more money because of interest. Or, if you did have cash reserves to tap into, talk about how your savings helped you avoid extra borrowing costs.

2. Explain why they should start now

While kids aren't going to have to pay for a plumber or dentist bill anytime soon, it's a great idea to encourage them to start building up their savings so it's there when they get older. Get them in the habit of allocating a percentage of their gift money and allowance in a saving account for something fun they want, as well as a percentage to be saved for a rainy day. Then talk through with them examples of what their “rainy day" might look like as they reach young adulthood. It could be for replacing a lost sweatshirt you borrowed from a friend, fixing a cracked phone screen, or even paying for a car repair.

3. Challenge them to level up future savings

Kids who regularly contribute to a rainy day fund and watch their balances grow can develop a sense of financial security from a young age. And once teens start working and earning income, you can help them learn about investing in products like a Roth IRA. This type of account is ideal since it earns interest tax-free and can grow significantly over time.


While some people use the old-fashioned jar or piggy bank system, in today's digital world, consider using tools like a debit card for kids with in-app tools to help them learn about money and how to save.



Teach kids early to make smart money choices with GoHenry's debit card for kids and the fun, in-app education suite Money Missions.


Written by GoHenry Published May 12, 2022 ● 2 min. read