Teaching My Kids About Saving

My kids love to spend money. More importantly they love to spend my money. Money management is a skill that is definitely high on our list of priorities. I believe teaching my kids about saving is an essential life skill that should be taught as early as possible.

Recently my 11-year-old announced that he was getting a car when he turned 17. Really? Intrigued, I asked him how he planned on getting said car and he replied that he was going to save up for it.

Of course, this was the perfect opportunity to give an impromptu savings lesson. I wanted to make sure he realized it was going to take more than a jar full of pennies to buy a car.

This coming from the kid that believes $1 will by him every video game on his wish list?!?

Our Car Savings Matching Agreement

I’ve agreed to go half on a car with my 11-year-old. Yes – you read that correctly. I’ve agreed to match each full dollar he saves from now until his 17th birthday in his car fund.

I did this for a few reasons. I wanted him to know that I took his goal seriously and would support him 100%. I, also, wanted to give him an incentive save. Similar to company-matching with our 401(k) accounts, most people are more likely to contribute if their employer is meeting them half-way.

With 6.5 years to go for his car purchase, do I think he’ll stick with this savings plan? Who knows? He may stop and start. He may just stop. He might surprise the nothing out of me and consistently save and end up with a sweet car once he turns 17. I’m ecstatic that he’s set a savings goal and is excited about working towards it.

How We’re Saving for My Son’s First Car

Car Shopping

Typically this is the reaction I get when we start talking money and savings. Once we set a specific goal, both my boys got extremely excited and invested with the savings plan. (I feel for my 4-year-old, when he realizes that he won’t actually be able to drive said-car!)

We’ve had savings goal previously for video games, trips to amusement parks, and pizza meals. I really have no idea why this sparked his interest so much more than the other items. The key is finding what makes kids want to save and zoning in on it. Make saving money fun!

Rather than dump all his money into a savings account, we came up with a budget and allocated a certain percentage towards his savings account.  He still has to maintain his monthly household contribution. Yes, I make my child pay a bill. He just had to use a video game rental service about 6 months ago when one of his friends started using it. I agreed with one condition – he had to pay the monthly service charge for it. If I don’t receive the money prior to the due date, it gets cancelled for that month. I’m teaching him accountability and responsibility early on.

He’s, also, working on a solicitation letter for family and friends to ask for donations and offer his services for a reasonable fee.

I’m leading by example. I’m open with my savings goals. My children see that I don’t purchase things on a whim. They are aware of items that are on my wish list and my target purchase time frame.

I encourage him to give. I’m a huge believer that by helping others you open the door to receive more and be blessed in other ways that are often more valuable than dollars and cents.

I’ll keep you all posted from time-to-time on how he’s doing with his savings.

How do you encourage saving money with your children?

  31 comments for “Teaching My Kids About Saving

  1. February 11, 2013 at 3:04 am

    Kudos to you for teaching your children valuable financial lessons while they are young. Hopefully this will protect them from financial heartbreak later on. And making them pay a bill? Brilliant!

    • February 12, 2013 at 12:15 am

      Thanks so much! Believe it or not, I got some not-so-nice comments from a few friends for making him pay that expense himself. I see so many children AND adults who just do not value the worth of a dollar. I’m really trying to raise up financially savvy children so they don’t make the same whoopsies that I did and save us all some heartache and dollars in the long run.

  2. February 10, 2013 at 7:14 pm

    I oh so believe in teaching money management and the development of creative skills at a very young age. In this day and time, I feel that both are crucial because of the economic woes. Excellent information and topic of discussion. Thanks for sharing.

  3. February 10, 2013 at 7:55 pm

    I like your savings plan. I encourage my children to save by telling them it is good to wait and rewarding them for saving for items by matching their efforts. It is important to teach children to manage money at a young age.

  4. February 10, 2013 at 6:47 pm

    I love love LOVE this! My son is 7 and constantly asked for this new game and that new game. We’ve been telling him the whole “be good and get an allowance” idea, but I think explaining bills to him would be a better bet. We’ve already had a savings talk(and blog post), and he’s been doing well with that.

  5. February 9, 2013 at 8:10 pm

    I think this is SUCH a good idea. :) And I love the way you are teaching him to go about it. That is some awesome mothering right there! stopping by from SITS Sharefest on Twitter.

    • February 10, 2013 at 6:33 pm

      Thanks for stopping by and the wonderful words of encouragement! Have a fantastic weekend :)

  6. February 9, 2013 at 7:03 pm

    That is a great idea to teach your children about money while they are young …it is so important for them to have these skills to prepare them for adulthood. Good for you!

  7. February 9, 2013 at 5:12 pm

    Great idea. I wish more parents took the time to really teach their kids about spending and saving. Powerful stuff. Visiting from SITS.

    • February 9, 2013 at 5:55 pm

      Thank you! Welcome SITSah :)

  8. February 9, 2013 at 3:43 pm

    Great post! I think that it is important to talk money planning and saving from a young age. Money is a really difficult concept to grasp as a child.

    • February 9, 2013 at 4:09 pm

      For many it’s hard to grasp at any age…hoping I can make a difference early on. Thanks for stopping by!

  9. February 9, 2013 at 3:29 pm

    Seeing as my little one is just a toddler, she’s encouraged to save simply by allowing her to put all of her coins in the piggy bank. Works like a charm! #sitssharefest

    • February 9, 2013 at 4:06 pm

      Baby steps! Great idea!

  10. February 9, 2013 at 3:25 pm

    Wow! This is great!! My boys are 2 and 5 months but I will totally follow along with you to get good tips for when the time comes to start teaching them. It won’t be long. What a smart mama you are!

    • February 9, 2013 at 4:06 pm

      Time flies so quickly :) I tried to start money talks around 2-3 years old when they first expressed interest in collecting coins. Glad to have you along for the journey :)

  11. February 9, 2013 at 2:05 pm

    I am very impressed with your son’s savings goal! You are providing him with an invaluable skill that unfortunately I am sure many children don’t learn. I don’t have children of my own yet, but I hope to instill in them this important life skill when I do (and am so thankful that my parents did it for me). Happy Sharefest!

    • February 9, 2013 at 4:04 pm

      Happy Sharefest! Thank you for the kind words. I’m hoping to teach him the lessons I learned the hard way at an earlier age. It’ll save us both tons of heartache and money in the long run.

  12. February 8, 2013 at 2:25 pm

    I love the idea of matching so your kids are encouraged to save!

    • michelledgarrett
      February 9, 2013 at 2:04 am

      Hoping this agreement doesn’t cause me to go into debt :)

  13. February 8, 2013 at 11:42 am

    I think its such a huge thing to learn about savings and our children really need to learn at a young age the value of money and how to save it. Great post!

    • February 9, 2013 at 3:22 am

      Thanks! I definitely agree. The earlier we teach them to appreciate the value of money and instill in them savings and budgeting techniques – the more likely those ideals will stick!

  14. February 8, 2013 at 3:12 am

    The matching idea is great. I know Dave Ramsey does the same thing with his kids and calls it the 401Dave plan!

    • February 8, 2013 at 4:25 am

      Huge fan of Dave Ramsey! Getting the kids products he has is high on my priority list!

  15. February 8, 2013 at 3:03 am

    I will be setting money saving goals once my kids are old enough. Teaching money management is SO important!

    • February 8, 2013 at 3:08 am

      So true! Good for you :)

  16. February 7, 2013 at 1:22 pm

    My son has a atm machine that is actually real he has a card for it and everything. He is only allowed to swipe his card after all his chores for the week are done. I put all my lose change in the atm and some dollars. He normally can take out 10 bucks a month to buy what he wants but I teach him to make smart decisions with his money. He quickly sees that 10 bucks does not buy him much so he saves it.

Join in the Discussion, Diva :)