Saving money is an essential life skill that lays the foundation for financial security and independence. By teaching children early, you help them move away from impulsive spending and towards healthier habits. Here are five practical tips for teaching kids and teens the importance of saving.

Young children (ages 5-10)

Help them watch their money grow

Give them a clear glass or plastic jar (rather than a traditional piggy bank) to store their savings, so they can watch their money grow. This transforms money from an abstract concept into a tangible resource that they can keep safe and add to over time.

Teach them about saving and overspending

If they receive pocket money, help them divide it into two jars with different labels: ‘Spend’ for small treats, and ‘Save’ for more expensive items that they really want. If they choose to spend all their savings at once, don’t be tempted to top them up right away. Experiencing the consequences of overspending is an important step in learning healthy saving habits.

Show them saving in action

If you’re putting money aside for a big purchase, turn it into a learning opportunity for your children. Whether you’re saving for a new washing machine or a family vacation, explain your process to your child so they can see saving in action.

Pre-teens and teenagers (ages 11-17)

Help them understand compound interest Encourage financial autonomy by opening a checking account and a savings account with an app so they can keep track of their savings. Alternatively, you could offer to pay interest on their savings (e.g., adding 10% to everything they save each month)
to show how compound interest works.

Encourage them to develop impulse control Just like us, teens are targeted by online deals and ‘limited time only’ offers that distract them from their saving goals.

Teach them to practice waiting 48 hours before making big purchases. When the intensity of the want inevitably fades after a couple of days, they’re more likely to make more sensible choices.