Kids and Money: 2 Ways to Instill the Habit of Saving

Money plays a significant part in our lives, and teaching your children to develop a good relationship with it at an early age is something they will thank you for later. 

Experience is the best teacher when it comes to money. Letting your little ones practice by doing some basic budgeting and saving will help them carry those habits into adulthood. However, money management for kids looks different than that for adults. How can you teach your children the value of money and how to save?

If your kids are between the ages of 8 and 13, the following techniques can be fantastic for teaching them the value of money and how to save for a rainy day. Remember: money management comes through practice, and financial principles will only take your little ones so far. By actually taking part in the process, your kids will develop a better understanding of money and the role it plays in their lives. 

Always Start With an Understanding of Where Your Money Comes From

Most kids think that money comes from Mom or Dad’s wallet. While that may be true to a degree, what they do not see is the other side of the story. It is your job as a parent to help them understand the reality of how money is generated. 

Rather than just telling your kids that money doesn’t grow on trees, though, take an active role in their money management journey by helping them appreciate the process. Explain what you do to generate money and how you carefully decide where your finances go every month. Then, you’re ready to try Method #1 with your little one:

Method 1: Have Your Child Work For Pocket Money

Your word will only go so far, so help your kids understand the idea of trading work for money by having them experience it for themselves. Make a list of tasks your child can do and assign a value to each. The more complex the task, the higher the pay they get. You can decide whether to assign a value to all household tasks or only to those your child does beyond their own chores.

While this is a great way to start a conversation about how money doesn’t always come easily, you should know that equating tasks with money also has adverse effects. At a young age, your child might start to associate all household chores with earning money. What you can do to avoid this is limit the paid tasks. Explain that they still need to do the everyday chores as their contribution to the household.

Method 2: Save for a Rainy Day With Money Jars

Once your child begins to recognize the value of money, it’s time to connect the concept to saving for a rainy day. Let’s say that your child wants a certain toy. Instead of giving into their request right away, encourage them to work for it and save the money they’ve earned. They would soon realize that toys can be pretty expensive, and if they’re only saving a dollar at a time, it may take longer than expected to make enough.

You can also turn the situation into a lesson on savings. Rather than having your child spend all their hard-earned savings on one toy, introduce them to the money jar concept and encourage them to put their money into three saving jars:

  • A jar for saving money (long-term goals)
  • A jar for spending money (short-term goals)
  • A jar for sharing (charity)

Whenever you pay your child, help them decide how to budget their money among the three crucial jars properly. You can provide extra motivation in the form of matching the money they save or promising them a special treat once they reach a certain goal. In doing so, your child will begin to equate money management with excitement and long-term rewards.


Financial management is one skill that everyone needs to have. Unfortunately, not all are equipped with it. It is your duty as a parent to prepare your kids for a world where they will undoubtedly have to deal with money. Remember: Money isn’t a bad thing, but poor management of it certainly can be. By making it a positive experience and helping your child build a good relationship with money early on, you’ll be setting them up with success.

If you are looking for a fun and informative way to educate your kids about money, consider downloading Kiddie Kredit. It is a mobile app designed to help you teach kids about money by completing chores and building credit for kids

John D Saunders

John D. Saunders is a Web Designer and Founder at 5Four Digital, CMO at Kiddie Kredit and an Automation Expert with a decade of experience building brands online. He's worked with clients including Audi, NAACP and Apps Without Code.