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Teaching Children to Save

Have you heard the saying, “Children are a map of their parents”? When it comes to financial matters this could be a a good thing or a huge problem, as many of today’s working Americans have not done a great job of saving and planning for the future. 

Let’s take a look at the statistics:

  • Americans owe $1.1 Trillion in student loan debt and $845 Billion in credit card debt.¹
  • 1 in 4 Baby Boomers has nothing saved for retirement.²
  • 52% of Generation X expect a decrease in their standard of living when they retire.³
  • 39% of Millennials worry that they will not have enough money to retire when they are ready.³

This is why the American Bankers Association founded National Teach Children to Save Day, which occurs every year in April. This year it is on April 20. Giving children the basic foundation to understand how to properly budget and save for the future is extremely powerful.

One of the easiest and most impactful ways to teach a child to save is to provide them with lessons on the importance and the value of delayed gratification.  You can teach this lesson with simple and easy to understand concepts. Here are two ideas to get started:

  1. Offer your child one M&M right now, two M&M’s if they wait for five minutes, or five M&M’s if they wait 10 minutes. This very simple example can teach your child about saving and compound interest that can be earned the longer that they wait.
  2. Have them set a goal to earn enough money to buy a desired toy or game and then create a chore chart or activity chart that allows them to earn money toward that goal.

If you have kids, you know they are very aware of money and always looking for more. Guiding this learning at a young age can help them to build a solid foundation for good money management habits when they grow up.

Here are four important money concepts to kick start your child’s early learning:

  1. The tree in the backyard doesn’t sprout $100 bills.
  2. Do you need it or want it? Teach them to identify the difference.
  3. Wait! Some things are worth it.
  4. Share what you have earned.

Taking these simple actions is a great way to set a positive example for your children about how to properly save for the future. And, children that have an example of solid savings will also have a map to a solid financial future.


¹”The 5 Most Important Money Lessons To Teach Your Kids” by Laura Shin,

²IALC Retirement Survey, 2016.

³Transamerica Center for Retirement Studies (TCRS) Perspectives on Retirement Study, August 2016.