Kids & Money

Teach kids how to save and delay gratification.

In this buy-now-pay-later world, it can be a real challenge to help your child learn how to delay gratification and spend wisely. Starting them early will help to develop behaviours that will help them for their entire life. We’ve put together a few tips and tricks to help you nail the process.

Set up a system

Start with helping your child pick a savings goal. Maybe they want a new bike or a box of Lego. It can be big or small, whatever is appropriate for your child’s age and earnings. Agree on a portion of their income to save each week, and find the date they should achieve their goal. Then, break it down into small milestones to help keep them on track, such as a month to month checkpoint. You may choose to help them visualise this in a fun way, such as a chart that gets progressively coloured in.

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Numbers in a bank account don’t have the same impact as real money, so we recommend paying your child physically in cash to make it easier for them to see their progress. If they’re earning money via bank transfer from an outside source such as a paper run, consider taking cash out to pay them with instead. Then you can help them set up jars or piggy banks or a box to store their cash in, with one for saving and one for spending wisely.

Check-in with them often

Habits are built through repetition, so it’s important that saving becomes a daily, weekly, monthly behaviour. This is where the concrete aspect of cash really helps, because they choose the action each time to put cash in their savings jar, and they reinforce that behaviour every time. It also makes them more conscious of their spending because they can see the amount in the jar get smaller.

Plan a time to check in with them each week or month to see how they’re going. Are they meeting their weekly savings targets? Why or why not? What challenges are they facing? Do they have lots of leftover spending money they want to add to savings? Is the savings goal too low or too high?

Your encouragement every step of the way is the key to helping them achieve their savings goal. Avoid topping up their savings or giving them extra cash as it will undermine the lessons you want to teach them. Achieving their goal will be that much more exciting for them if they earned every cent themselves and stuck to their savings targets every week. It’s a great lesson for them to learn that if they can’t pay for it in cash, then they can’t afford it.

If they need more spending money, help them work out how much longer it would take to reach their goal if they changed their savings habits – they might decide they don’t need to spend that money after all. You can help them learn how to be independent, while still knowing they’re supported.

Lead by example

Children pay attention to everything their parents do, and love to copy their behaviour, so you can’t just talk the talk, you have to walk the walk. Lead by example, and keep your own spending habits in check. Avoid shopping because you’re upset or bored and want a reward, and you will teach them a very important lesson, that unnecessary spending doesn’t equal happiness.

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Keep them in the loop with your spending habits. You can discuss your own savings goals and your progress, even showing them when you deposit money into your savings account. It will help to reinforce the habits they’re building if they see you do it too. You can also take the opportunity to show how you’re spending wisely when you go shopping together, by asking yourself if you really need each item you pick up, then show how you can walk away from it and change your focus. You may even choose to share your slip-ups with them, to show them it’s okay to fail sometimes as long as you keep trying to do the right thing.

Teaching your child delayed gratification can be hard, especially if you struggle with it yourself, but working with them to help them stick to a savings goal will let you teach your child vital lessons that will help them become successful, independent adults. It’s never too late, so Squeeze the Day, and start today!