Teaching Your Children How to Save - part 1

Saving money is a hard concept to learn, especially for a young child. I remember hearing often as a child the phrase ‘that money is burning a hole in your pocket’. Thankfully, my parents were able to teach me to save my money and I don’t hear that phrase anymore. As parents, we have a very important responsibility to teach our children to save and prepare them for a stable financial future. With examples to follow and the knowledge we give them, hopefully our children will be prepared to be financially responsible by the time they are young adults.

Teaching our children to save their money is one of the best things (besides the gospel) that we can pass on to our children to prepare them for the future. But how do we do it? Here are a few tips that may assist you in teaching your children to save:

First of all, Start Young. Any child who can hold money can spend it (or save it). The earlier you start, the easier it is to make it a habit and life-long practice. But it is never too late to teach your children, even your grown children, about saving.

Second, Make it FUN. If it’s fun, your child will do it, do it without you telling them to and probably remind you to do it too. Find some fun money banks that interest your child and will make saving fun. Be excited when your child earns money and can put it in their own money bank. My 2 year old loves to find money to drop into his bank. And along with that, find a fun way for them to save and pay their tithing. My kids have a separate jar for tithing and love filling out and turning in their own tithing slips.

Along with making it fun, your child is also never too young to have a savings account. Many banks and credit unions have special savings accounts, CDs, etc available to young savers. Sometimes the interest rates are better, they have lower minimum amounts and also offer incentives to young children or youth for saving. Let the bank or credit union help you make it fun to save. Take a ‘field trip’ to the bank to deposit their money. The more fun it is, the more they will want to do it.

Third, Set Goals. If your child is saving just because you tell them they need to, it’s not very fun or exciting for them. Discuss with your child what they are saving for. Elder Marvin J. Ashton wrote in the One for the Money pamphlet, “‘Save your money’ is a hollow pronouncement from a parent to a child. ‘Save your money for a mission, bicycle, doll house, trousseau, or car’ makes understandable sense.” If they have a reachable goal, then they are more likely to understand the benefits of saving and begin the habit of saving for their wants.

Your child may need to be reminded of those goals on a regular basis. How often have your children, or even you, been tempted to purchase something small like a candy bar while waiting in the check-out line? If your children know that those impulse buys have to be bought themselves and that it will take that much longer to save for their goal, then they (and you) are more likely to save for what really matters.

Related Ensign Articles for more reference and tips:
Margo Johnson, “Lessons of an Allowance,” Ensign, Sept. 1996, 71

Marvin K. Gardner, “Staying Prepared,” Ensign, Feb 1979, 24

Jenniev J. Poulson and John R. Christiansen, “Can Children Learn to Manage Money?,” Ensign, Jan 1971, 57

Kay Przybille, “Stretching Your Dollars,” Ensign, Jun 2009, 36–37