Teach Your Child to Be a Saver, Not a Spender

Is it predetermined that you will be a good saver or is this learned behavior? It dawned on me the other day that so many people have different ideas about how to spend and save money and I’m not really sure when this begins. How early is too early to learn about spending and saving money? There are at least a few things parents can do to start teaching their children about spending and saving at an early age.

Allowance is a Good Thing

I started receiving an allowance at a very early age. I was convinced my parents did this because they were tired of telling me that Barbie dolls don’t grow on trees, but of course now I realize they had other motivations. By giving your children an allowance, you are laying the foundation to start teaching them how to make their own financial decisions.

Say No

OK, go ahead and laugh, but this is hard for some parents, especially when you’re children are asking you to buy something for the millionth time. Sometimes it’s just easier to give in, but don’t do it. Saying no is a great way to start talking to your kids about earning, saving, and spending money. If you start the conversation with “money doesn’t grow on trees” you’ve already lost them. Relate the conversation to your kids. Talk about something they want and how they might be able to earn or save money in order to buy it themselves.

Offer Some Guidance

Whether you want to or not, this one is inevitable. My brother, sister, and I all had three different financial personalities. My brother would save every dollar he was given and never spend a dime. I would find something to save for, buy it, and then start saving again for the next thing. My sister, however, would spend her allowance the moment she got it. It never failed. Each month she would come back from the candy store or the dollar store with a bag full of junk she bought for $5.

You are not always going to agree with your kids’ financial decisions, but sometimes they need a little guidance from you, the parent, to become better at making decisions about money. Once my parents stepped in, and after several months of my sister not being able to touch her allowance, she finally got the picture when she realized how much money she had saved at the end of her hiatus from spending. Be patient. For some kids, it takes a little longer to get the idea, but it will come.

Reward Good Saving Behavior

One of the ways my parents rewarded good saving behavior was by matching our savings. I distinctly remember saving all my birthday and allowance money for several months in order to purchase a brand new bike. If I think about it, my allowance was only $5 per month at the time, so it would have taken me years to buy that bike myself, but my parents came up with this great idea of matching my savings. They were aware it would take me a long time to even come up with half of the amount, so they figured if I could do that then they could come up with the other half for the bike. You certainly wouldn’t have to do this for all of your kids’ purchases, but this is a great way to reward good saving behavior and it allows kids to become better at saving for bigger items.

Be a Model Saver

One of the top ways you can teach children to save money is by saving money yourself. If you’re just buying whatever you want every time you go to the store, you aren’t teaching your children how to save money or make responsible spending decisions. If you’re saving for a new TV or a family vacation, include your children in on these discussions. Let them see how much money you’re saving each month, and demonstrate ways to spend money responsibly in order to save for that TV or vacation.

Like any project with young children, these steps will take time and patience, but in the end, it could result in financially responsible young adults. What more could you ask for as a parent?

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5 Responses to Teach Your Child to Be a Saver, Not a Spender

  1. Karsten says:

    This is SO important. Not only in regard to saving money, but also in regard to creating a future environment that is worth living in.

    At the moment too many kids are learning from their parents that consuming, wasting, polluting, having fun without thinking far, etc. is OK and turn into future wasters and polluters.

    However, if the kids learn that they will need to do this differently and find recognition for their frugal actions maybe, just maybe, they and their kids will have ENOUGH energy, food, and water to live a good life.

    Sooner or later we all have to choose between right and easy. In my opinion, it is better to teach kids what is “right” now rather then let them experience later the results of choosing “easy”.


  2. Christina says:

    Is there such a thing as “overdoing” including children in financial discussions? Because my six-year-old told a supermarket employee he was saving to pay for our house…

  3. Zook says:

    Sadly Christina, with the kids folks are having these days, 6-years old is probably not early enough to have them learn saving.

    Kids should be taught the importance of saving and finances right from pre-school. Just beginning to talk about money and how much the toy cost and food cost and what happens with mom and dad’s paychecks. It is VERY important and not enough youngsters are getting the clue. The cycle isn’t being broken and it is a shame, it is getting worse in my estimation.

  4. Anwar says:

    Oh, yes, I agree. We have 5 children, from ages 22 – 7 years. My wife and I, are concerned about ensuring our children do not get used to just putting out their hands and expect money to be there.

    We have a fixed allowance plan in place for the 2 elder kids and will be starting the next 2 children on an allowance next month.

    (Actually, we even have a “pledge” signed by the 2 elder girls that they will save 10% of the allowance. Sigh…..it is not happening yet.)

  5. mab says:

    Zook is absolutely right about starting young!

    In fact, I had a totally spontaneous (and touching) conversation with my daughter, 3, this morning. She asked me, “Why do you work daddy?”

    Instead of telling her I *had* to work, I told her that I enjoy what I do and my boss gives me money for doing it. And we use that money to buy things we need and want like groceries, the house we live in and toys we play with.

    She sat silently thinking for a minute and finally said, “And apples! Mmmmm…..”

    Got to love kids.

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