With so many families living paycheck-to-paycheck and rarely having the ability to save for the future, learning tips for saving money early can be a crucial life skill down the line for our little ones. Check out these seven bits of wisdom you can start sharing with your children in celebration of Teach Children to Save Day! 

Talk About Money

Talking about money in general, let alone around our children, is a social taboo. Many of us can probably remember our own parents silently struggling in the grocery store checkout line or plastering on a worried smile at Christmas when financial circumstances were less than ideal. It is normal to experience ebbs and flows in our finances throughout our lives, and while it is important to make sure the children we care for always feel safe, the impacts of financial ups and downs are invaluable lessons to impart on them. This means being candid with them about why they can only order water at a restaurant. This also means being honest about why they don’t get to go to Disneyland every year. Explaining your situation in a digestible way to them as they grow will help to unveil the mystery of adult earning and spending. 

Teach Wants vs Needs

When we were kids, everything in our visual vicinity at the grocery store was a need. And a desperate need at that. What if our children could understand the difference between wants and needs? What if they were in charge of the dollars they spent on their toys and their school supplies? Teaching kids early on the difference between wants and needs, and how to responsibly allocate their money, will be a small but important preview into adulthood. 

Allow Them to Earn Money

You have to make money to spend money. The only way a child will be able to employ any of these money-saving lessons will be to have some cash to burn in the first place. Rather than just giving them a weekly allowance, however, begin with the most important life lesson of all – nothing in life is free. By giving your children age-appropriate tasks and tying each of those tasks to a dollar amount of earnings, they will get to experience real-world earnings in advance. Make it as complex as you’d like. Give harder tasks, such as mowing the lawn, a higher earning than easier tasks, such as taking out the trash. Allow each child a fair share of tasks and earnings (similar to shifts at a job in the real world). However, consider allowing them to choose their tasks at first. Maybe one will begin with only the easy, while their sibling accomplishes the heavy hitters. Watch your child’s response to earning less, and watch how quickly they change their behavior to reach their earnings goals. (And sit back and relax, because your time of being the sole caretaker of your home will be long gone!)

Have Them Set Goals

Once your child has begun earning her own money and understands the importance of it as well as their wants versus their needs, it’s time to help them set some goals. Give them a few categories to work with. Give them a fun category, of course, because what is a child’s wishlist without a few toys? Don’t forget to give them a practical column as well, though. Parents are in charge of supplying their children with their wardrobes, sure, but what about those name-brand running shoes that will set them apart from the kickball competition in gym class? Or the dress that is just a bit too high-fashion for a mother-of-three’s typical shopping budget? If you have a foodie in the family, consider having them save up for special foods they really enjoy, such as a fancy dinner out or a trip to the candy store. Have them write their goals out and record milestones they meet towards each one. 

Teach Them to Record Their Spending

In addition to a goal tracker, having kids record all of their spending–big or small–will help to pull the curtain back a bit as to what they are spending their hard-earned cash on. This activity may help them confront a spending habit that is keeping them from meeting their goals. Maybe they always grab a pack of gum in the checkout line, or a small toy that they can afford in the moment but doesn’t make them nearly as happy as their goal toy would. Whatever the case, they will likely be shocked into saving even better if they realize they are only keeping themselves from what they really want. Additionally, tracking spending alongside savings may provide a needed encouragement that they are on the right track to meeting their goals.

Let Them Make Mistakes

Kids are inherently spontaneous. A surprise trip to a theme park may sound like a nightmare to most adults, but to a kid it’s the most exciting day of their life. Similarly, spontaneous spending is going to be an almost instinctual habit for most littles. If your child insists on spending their money in place of saving it for their goals, fight the urge to lecture them on it. This is a lesson that many adults have to learn the hard way, and at that point it carries far heavier consequences. Messing up is a part of learning. As long as they are tracking spending, they will most likely notice the error they are making in keeping them from their goals all on their own.

Set a Good Example

As a parent, you probably already know that every move you make is being watched and replicated by the young ones in your home. If you make it a point in this money saving journey to set a good example for them, you are literally setting them up for success. Explain your decisions about money as you make them in a digestible way for your kids. When you buy groceries, vocalize the reasons you decide on which milk and bread to buy. Note to your kids when off-brand options are better for the budget (and similarly, when they just aren’t worth the savings!). Get your kids involved in the family bills. Explain that everything in the house costs money, straight down to the lights and water. If you have a system for paying bills that ensures they get paid on time or early each month, share it with them. Every good example you can soak into your little sponges now will only make them more prepared for life on their own.