How to Teach Your Children to Save Money

How to teach your children to save

Saving is a habit that needs to be inculcated since young.  Children need to understand and appreciate the value of money. The idea is not to groom your children to grow up and be a money-face monster. The whole idea is to expose them to wealth building knowledge and prepare them for their future.  

There are many ways to develop the habit of saving.

I spoke to some young mothers and here are some of the tips they have to share:

1. Pay Your Children after they complete a task

In this generation, kids or even teenagers are having a very good life. They have maid at home to serve them. Even when they reach the age of 18, they are still unable to wash their clothes, cook a simple meal or even sweep the floor.

Here’s what you can do. Assign your children a specific chore. After completing it, a small amount of money will be paid to them. Each task has a different monetary value, depending on the difficulty level. If they do a great job on a consecutive number of days, you can reward them with a bonus money. However if they perform badly, or when you hear too much ranting and grumbling from them, money will not be paid to them. In this way, it not only helps to train your kids to be able to do simple tasks at home, it also teaches them to be more independent in life.

When the children gets older, you can teach them how to invest their money.


2. Buy a huge piggy bank

After receiving their first payment, drop the money into the piggy bank for them to see. I would suggest buying a piggy bank first and let them visually look at the money accumulated over the time. They can see their hard earned money and will be more motivated to work on more assignments assigned to them. When the piggy bank becomes full, you can bring them to open a savings account at the bank to deposit their money.

Do it once every quarterly and show them their updated bank statement. They will learn to appreciate how their savings can accumulate over the years!


3. Use their money to pay for things they damaged/lost

Of course, after learning how to earn money, we need to teach them to be responsible for the things they own. If they damage it, they have to pay for it. Children tend to rely on their parents to look after their things for them. When they start schooling, they tend to misplace things.  Most commonly their wallets, spectacles, pencil cases, or even textbooks. So now, they can use their ‘hard-earned money’ which they’ve accumulated over the years to replace their lost item.

Differentiate a need and a want. If they want to get something they need, of course you have to buy for them because it is a need. If it is a want, you have to ask them to use their own savings to buy it. This teaches them the value of ‘hard earned’ money.


4. Pay them to catch house pests.

Rule number one. Ladies…You must not shriek in front of your children when you see a cockroach/spider/lizard/ or anything that crawls and flies.

Rule number two. Pretend to be brave and try to catch it. Your body language must show you are not afraid.

Teach them how to catch by demonstrating (best option), if not, verbally describe clearly to them (not really recommended). Do it a few times. For the rest of your life, you do not have to worry when you see a cockroach running pass you. This has to be taught when they are very young. After they show you the dead body body of the insect, PAY THEM!


5. Show them your household finances

Bring them to a market. Show them how much does it cost to buy fish, meat and vegetables. When dining out, show them the prices of food on the menu. Let them get a grasp of your family expenditure. I think the problem with kids nowadays is that their parents do not bring their children out to the market, or even talk about what is on sale, or how much they have saved from the market.

My mother cooks at home everyday since young. We hardly dine out, and even when we do, we try to order the less expensive food. No seafood, no fanciful meat. We don’t grumble and create a scene at the coffeeshop when our parents did not order chicken wings or prawn rolls. In fact, we appreciate the times when my mother whip up some seafood dishes at home, and she will brag how much she spent at the market. I appreciated the moment when they brought us to the market everyday and taught us how to save up during grocery shopping.


Most of the time, kids won’t get the idea of saving money by themselves. It’s the parent’s job is to educate them and teach them this essential life skill.


Share with us how YOU teach YOUR CHILDREN to save!  Type it in the comments below 🙂


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  1. Kel

    My Dad taught be about the savings, interest and simplified monthly statement when I was young. Back then he gave me 10% interest and even bought me those colourful plastic piggy-shaped banks. One thing to add further is to buy different sizes piggy banks. My Dad did this, he bought three different sizes, large, medium, small. For the large, he would give 10% interest for whatever amount it was inside but I can never take anything out until I’ve entered secondary school(CPF). For the medium-szied, it came with a goal attached to it. Saving up for a game/toy and once it’s hit, I can buy it(Goal saving), rinse and repeat. The smallest one he said I can take or put money in but it won’t earn any interest(ATM).

    Every Sunday we would review my savings and he would ask about my budgeting(he taught me that too after I spent a week allowance in two days, end up borrowing from a friend for food money and a hell load of problems that came after with their parents). Maybe my Dad was a little high level but it gave me quite the insight into savings, budgeting, power of interest, especially compounding interest.

    1. The Gf (Post author)

      Wow, 3 piggies! How long did you take to fill the largest size up?

      And I think most of the kids will only fill the medium size bank just to buy their favourite toy. Haha!

      1. Kel

        Haha… I didn’t fill it up the biggest one though. While we were shifting house, I opened them up and parked whatever was inside into my savings account. But the 3 piggies was a great lesson learnt. Up till today, the lesson is still fresh in the mind and I’m sharing it all the time with friends and juniors in their quest for financial management and freedom.

        I always try to save up more for the mid-size piggy and my Mum cheated the system a bit. She would say something like, “if you save up to $10, I’ll add $5 for you so you can go buy it.” When I started learning percentages, when I saw it’s 50% increase, my eyes light up like those kawaii anime girls eyes. Hahaha…

  2. My Sweet Retirement

    I am only doing number 2 out of your five suggestions. I agree number 4 is a bit weird and extreme.

    1. The Gf (Post author)

      Initially I thought it was weird too. But you will find it awesome when your whole house (wife + children) starts screaming when they see a cockroach running around.

      Just treat this whole thing as a ‘Bounty Insect Hunter’. 😀


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