3 Ways to Teach your Kids How to Save

Teaching your kids the value of saving money is one important habit you can instil in them while young.  From their point of view, Mommy and Daddy never run out of money since they do not have yet the concept of earning and saving.  Here are some tips to make your child understand and appreciate the concept of money and saving it, little by little.


The good old alkansya.  As soon as your child can grasp the concept of numbers, and understand that money is used to buy things, get him a piggy bank. A transparent one would work best because your child can visually see his money “growing”.  Start with a small one, so he doesn't have to wait too long to fill it. Give him loose change and let him drop the coins himself. Once the alkansya is filled, take out the coins and count how much money he has saved.  Ask your child what he would like to purchase from his savings and bring him to the store. Guide him as he purchases – show him 2 options that fit in his budget. Take this opportunity to teach him how some items are more expensive than others, and why he needs to make wise choices. Gradually introduce a bigger alkansya until it becomes second nature for him to save. (Tip:  Make an alkansya together with your child using a clear bottle with lid.  Punch a coin slot on the lid and decorate the bottle with your child. This will make him more excited about putting coins in it.)


Double the savings. As your child gets a bit older, you can challenge him to save more by matching the amount he saves. Say, if he puts in P5.00, then you will also put in the same amount, thereby doubling the savings.  If someone gives him money as a gift, give him the choice of spending it or saving it.  If he decides to save it, make sure you double it as well.  The objective is to encourage your child to save more by helping him with a little motivation.

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Open a bank account.  While I am not aware of any bank products that cater to very young children (like the Happy Saver's Club during my time), opening a saving's account or an ITF (in trust fund) for your child with a passbook and ATM card when he is old enough to add and subtract will be an important step.  This will let your child appreciate how his money grows and earns interest in a bank. Show him the passbook everytime he makes a deposit or withdrawal so he gets a firm grasp of the concept of saving in a bank - when you deposit, you add to your savings; when you withdraw, you subtract from it.  

Whenever your child asks you to buy something that's more of a want than a need, refer to how much money he has in his (piggy) bank account.  If he has enough, then he can buy it.  If he doesn't, encourage him to save some more so he can afford it.  Keep in mind though that you should let your child purchase what he wants, no matter how useless it may seem to you (unless the item is dangerous or not age-appropriate). This way he will learn to appreciate the value and rewards of putting money aside.  Eventually, he will learn to discern the value of saving and spending for the more important stuff.



Photography by David Hanson Ong