The earlier you start teaching your children to save money, the better off they’ll be given how important financial skills are to navigating life.  Last week we began the discussion on teaching children to save and today we introduce more sophisticated saving strategies for older children.


First talk to your children about needs versus wants. Once children understand that needs come first and that sometimes we have to wait for the things we want, it gives them a foundation to see the value in saving.


It’s important to explain to your child that “Money is finite and it’s important to make wise choices, because once you spend the money you have, you don’t have more to spend.”


You should also begin to engage your child in more adult financial decision-making.  For instance, talk about deals, such as buying everyday staples like paper towels in bulk to get a cheaper per-item price.


Give your child some money in the supermarket and have them make choices about what to buy, within the parameters of what you need, (for example vegetables) to give them the experience of making choices with money.


Let them manage their clothing budget. Give them firm guidelines on how much they get. Once that number is discussed, they can access that money until it is used up. This will teach them to shop for the best deals rather than rushing out in one big shopping spree and spending it all at once. As a result, they will find out how much more they can get if they manage their budget and spending.


Have your child set a longer-term goal for something more expensive than the gifts, toys or movies they may have been saving for. “Those sorts of tradeoffs, called opportunity costs — what are the things you’re giving up to save money — is a very useful thing to talk about. At this age, kids are trying to not save because they want to buy stuff, and are not thinking of long-term goals.  By letting them give up one thing to get another teaches patience and sacrifice.   For example, if your child has a habit of buying a snack after school every day, they may decide to put that money towards an iPod.



  • Always approach the concept of money in a positive way. Avoid phrases such as “I can’t afford that” or “We’re not rich, you know.”
  • Set a good example. If they see you budgeting and you talk about budgeting, they will understand and apply the concept more readily in their own life.
  • Encourage them to do extra chores like washing the car rather than just washing the dishes. Let them know its saving money rather than paying at the car wash.
  • Celebrate your own budget successes so they see the good things that come from budgeting.


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