5 Ways to Teach Your Child To Save Money

Are you struggling to help your child learn to manage money responsibly as they grow up? It’s a difficult balance to strike. On one hand, they are old enough to have some independence. But on the other hand, they are still young enough that they don’t fully understand the value of money. That’s where you come in.

The sad fact is that financial literacy is not taught in school. So moms and dads: you are responsible for teaching your children financial literacy. And like most things, you can’t do it in one sitting. It’s a skill your child builds through practice, trial, and error.

Read on if you’re looking for ways to teach your child about responsible financial management without putting yourself through too much agony. These tips will help guide your child towards sensible choices and healthy habits regarding spending, saving, and donating. The earlier you start, the better. 

1) Plan and set clear rules before you hand over any allowance

Before you start giving your child money, sit down and make a plan. It doesn’t need to be complicated. 

Decide with your child, for example, how often you want to provide them with allowance, how much allowance you plan on giving, what your child has to do to earn that allowance, and the rules for the spending of that allowance (including the consequences for the failure to follow those rules).  

Whether you want your child to reserve a percentage of their allowance for saving, for donating, and for spending, decide that percentage breakdown before you hand over any allowance. This way, your child will have clear goals in mind and know exactly what they are working toward.

A general rule of thumb is 50% for spending, 25% for saving, and 25% for donating.

2) Start with a small amount of allowance each week

Whether your child is still in primary school or middle school, consider starting with a small amount of allowance each week. Remember, you are not bound by labor laws. For 10 or under, we recommend $3 – $5 a week. For the 11-13 set, we recommend $5 – $7 a week.

If you’re not sure where to start, tie the allowance with a set of “must do” chores (like setting and clearing the table, cleaning their room, taking out the garbage, and loading and unloading the dishwasher) and a set of “optional” chores (like yardwork or vacuuming) where they can earn additional allowance.

Ensure that the chore chart is visible and is clear for you and your child so that accountability is maintained.

3) Teach them the importance of saving and investing

As soon as your child is old enough to understand the value of saving money, do so. Start by teaching them the importance of putting a portion of their allowance into savings and having them set up a savings account. This will help them get used to responsibly managing money. 

As they age, you can introduce other ways of making their money work for them in a more productive way than an emaciated savings account. For example, they could put their money into stocks, mutual funds, EFTs, and even cryptocurrency. Investment products are much more diverse than when we were growing up. 

Investing will help your child learn the value of saving money, investing, and building wealth — habits they will carry with them as they enter adulthood.

We’ve found that once you teach your child about investing, they’ll be saving more of their money for the purpose of investing rather than spending it on Pokemon cards or Nintendo Switch games. 

4) Help them understand the value of giving back

At a young age, it’s essential to introduce your child to the concept of giving to others. Whether its feeding the homeless, donating to charities, or helping out with community projects, encourage your child to give back to their community. The more we teach our children the importance of private charity — as opposed to them thinking that the government should be responsible for everything — the better and more free our society will be.

As for charities, you can teach your child that their donations should be made with responsibility and rationality. In other words, just because a “charity” they saw on a bumper sticker or on Instagram tugs at their heartstrings, doesn’t mean it’s a good charity. If, for example, if more than 25% of an individual’s donation goes to administrative costs, then that’s a charity your child should avoid. Or if a charity is cagey with its tax reporting, that should also be a red flag.  

They can use sites such as Charity Navigator so that they can make more intelligent donations with their money. A charity should be accountable to its donors.

5) Set up a chore program that pays by the hour

If your child is old enough to help out around the house, then set up a chore program that pays them by the hour. This will teach your child the value of hard work and responsibility. 

As your child grows older, you can increase the amount they earn per hour for helping out around the house. This will help them understand the value of their time and how it can be used to earn money. This can also help pay for regular expenses, like groceries or gas.


Helping your child become financially literate is a process. You won’t be able to do it in a day but at the same time, it only takes a day to start the process. You can do many things as a parent to guide your child towards sensible choices and healthy habits regarding spending, saving, and donating money responsibly. With a bit of guidance, there are many ways you can teach your child about responsible financial management and help them become financially independent as they grow older.

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