5 Ways To Motivate Kids To Save Money

It is no secret that saving money requires tenacity, especially bigger savings goals, and the ability to think of the future. Kids often prefer things here and now, and have shorter attention spans. So how to motivate kids to save money?

Why you should motivate kids to save money

Saving money is often spoken about as given, the very basics of money, the easy part.

And for some it is easy, like a second nature.

But this often depends on your money personality and your money story (how your life so far has affected the way you feel about money).

For some, often including kids, it is harder.

Luckily though, it is skill that you can, and should, practice!

Why?

Because saving truly is a corner stone of personal finance. It is essential to financial health and reaching goals.

If you help your kids learn how to stay motivated to save money early on, it is great practice for later on in life when they are working towards bigger goals that require more money and longer time to save.

This practice is especially important if your child’s money personality makes it hard for them to save money.

Being able to save money is also a form of delayed gratification which is a great ability to have. I talk about more on how to teach delayed gratification to kids here.

1. Talk about family savings goals

You can model saving money and setting savings goals by talking to your kids about them, otherwise, they most likely wouldn’t have any idea that you too save money.

Modelling is such an important way you can teach your kids any kind of desired behaviour as they are so observant.

In fact, you say one thing and do the other, your kids are more likely to do as you do, rather than as you say.

Talking about your successes in saving money and the goals you have reached are great lessons for your kids to learn, and hearing how it is possible for you to reach your, or family goals, makes it more motivating for your kids to save money for their goals.

They can see from you sharing your experience that they too can be successful and believe in their ability to reach their goals.

2. Involve kids in the family savings goals

A great way to motivate your kids to save money is to involve them in the family savings goals.

This could be saving for a family holiday and they can save the money for their own spending or for something special they want to do while away.

Being involved in a bigger family goal will not only empower your child but also make them appreciate the end goal much more as they were apart of making it happen.

It is essential to make their portion of the goal realistic and age appropriate though, so it is reasonable to expect them to succeed.

Because that’s what we want, nurture their belief that they CAN save and reach savings goals, that belief is such an important part of staying motivated.

But if you have set a realistic goal for them and given them the tools to reach it, and they still don’t, it is equally important to not bail them out and provide them the money to cover what they were supposed to cover.

If you do, this would defeat the purpose of the practice, because why would you go through the trouble of working to reach a reward if it will just be handed to you no matter what you do?

3. Help your kids make savings goals

The savings goals themselves play a great part in whether your child, or you, can stay motivated to work towards them.

It may be unreasonable to expect your 5 year old to be able to save $500, but $50 may be more doable, $20-$30 even more so.

The goals should be set keeping their “income” in mind and be realistic in relation to that.

Do they get pocket money? How much opportunities do they have to earn extra on top of their usual?

This is all of course very dependent on the child’s age.

What we want, especially at the start, is relatively easy wins for them, to boost their belief in themselves and in their ability to save money.

After your child, with your help, has decided what they want to save money for, you can help them break it down to smaller portions to help stay motivated and see progress.

You could approach this in two different ways: set time frame or set amount.

If they have a set time frame, a specific date they want to/need to have this money by, you can show them how to divide the goal amount by the number of weeks they have before the set date.

For example, they want to save $30 and they need the money in 4 week’s time. You divide $30 by 4 giving you $7.50.

So, in order to reach $30 by the time they want, they need to save $7.50 per week. This is a great reality check to see if it is possible for them to save the required amount and for them to see if they need to earn extra money.

If there is no set time frame, you can start with set amount. In this approach you ask them how much they are willing to put aside towards this goal each week. Then you divide the goal amount by their weekly saving amount resulting in when they will be reaching the goal.

For example, the goal amount is $30 again. Your child has decided they will be willing to save $4 per week towards this goal. $30 divided by $4 results in about 8 weeks before the goal is reached.

As an extra exercise in this case you could show them what happens if they save a little bit extra each week and how much quicker they will reach their goal.

For example, if they will be willing to save $5 instead of $4 they will get to their goal in 6 weeks rather than 8 weeks. And that is just $1 difference per week.

The comparison can be very powerful when it comes to motivation!

4. Motivate kids with savings charts

Saving money is often kind of invisible. It’s not necessarily that easy to visually see how you are doing with the goal.

It is much more motivating, especially to kids, if you can see the progress you are making.

Savings charts are a great visual aid and a way to boost your child’s motivation when it comes to saving money.

Savings charts are graphics with lines or shapes that you colour in when you have saved a predetermined amount of money. When the chart is fully coloured in, you have reached your savings goal.

They give you a visual idea of how close you are to your goal and adds extra excitement when your child saves money as they get to colour in more shapes/lines.

I talk more about savings charts here.

5. Motivate kids by paying them interest

If your child has a big savings goal, and maybe even an important one, like their first car perhaps, or moving out costs, and you want to encourage and support that goal, you could pay interest to your child.

Kind of like a bank pays you interest on your savings.

For this you agree before hand how much they need to contribute and how much you will contribute.

Your contributions, or the interest, should be tied to how much your child first saves.

For example, every time they have saved $20 for their goal, you give them $5.

The amounts of course depend on what makes sense from the goal’s perspective. If they are saving $5,000 for their first car, $5 for every $20 doesn’t make much sense.

This way you can contribute to their big purchase while they still learn the lesson from working hard to get there.

How to support your kids while they save money

Saving money isn’t always easy and often requires giving up something you’d like now.

Check in with your kids regularly as they save, this way you can catch it early if they falling off track and if necessary, help them adjust the goal so they can still experience a success.

There’s no point sticking to an unattainable goal and then fail. The experience of success is so important to your child’s self esteem and a building block to them being confident with money.

These check ins are also a great way to normalise talking about money in a constructive and positive way.

The check ins could include (in age appropriate ways):

• Checking in on the progress: are they on track to reach the goal? Are they losing faith? Could they reach the goal quicker?
• Talk about what they spend money on recently, would they be interested to forego some of similar spending to reach their goal faster (show them how to calculate the numbers to help them see what is achievable with extra sacrifice)
• Brainstorm ways to earn extra money to reach the goal faster

In the event of them not reaching their goal in the planned time frame, help them do some reflection. Could they have spent less somewhere else? Or worked a bit more to earn more money?

But it’s important to leave shame and guilt out of these, make the conversation as constructive as you can, it is a great way to learn too that choices (spending/not working) have consequences (not being able to get something they desired).

For this lesson to work, you can’t bail them out and pay for it yourself. They will have to go without then.

It would be great if the savings goals weren’t for something that they NEED because if they are not successful, you have to step in which isn’t a lesson you want to reinforce!

When your child does eventually succeed in saving for something they wanted, make it a big deal!

Celebrate and take them to purchase the item/activity as soon as possible so the excitement from reaching the savings goal doesn’t fade.

Having these money experiences and conversations at home will have such a positive impact on your child’s future relationship with money and help them have a healthy finances later in life with less financial stress!

Do you remember saving for something big when you were a kid? How did you feel when you reached the goal? I would love to hear in the comments!