Teaching Kids to Save: Fun, Practical, and Actionable Steps

#052 [0:00] - Introduction

• Speaker Eric kicks off the episode with an engaging question: How does the way we handle our money today affect our children’s financial future?
• Introduction to the main idea: Teaching kids about saving money and the long-term positive impact it can have.
• Highlights the importance of starting early and lays out the fun, practical tips that will be shared in the episode.

[1:30] - Podcast Overview

• Introducer introduces Raising Financial Freedom, the podcast dedicated to empowering parents with tools to teach financial literacy to children.
• Sets the stage for today's discussion: Understanding how saving creates the foundation for habits like budgeting, avoiding debt, and achieving financial independence.

[3:00] - Why Teaching Kids to Save is Critical

• Speaker 00 explains the importance of saving as an essential life skill.
• Examples of how lessons in saving build long-term habits (e.g., starting with toys, progressing to cars, homes, and retirement).
• Cites research that links early financial literacy with reduced debt, better emergency management, and smarter investing.

[4:45] - Tip #1: Start Early

• Kids are naturally curious and absorb the behaviors they see.
• How starting lessons on saving during childhood increases the likelihood of these habits sticking.

[6:15] - Tip #2: Make Saving Fun

• Ideas to make saving exciting for kids: 
  • Use clear jars instead of piggy banks to make savings visible.
  • Create goal charts to track progress toward a specific purchase (like a toy).
  • Gamify saving with creative activities (e.g., coloring charts, sorting "needs" vs. "wants").

[9:00] - Tip #3: Use Incentives

• How matching savings (e.g., giving 50 cents for every dollar saved) introduces children to the concept of "free money."
• Celebrating savings milestones with small rewards, both material (e.g., treats) and experiential (e.g., outings).

[10:45] - Tip #4: Model Good Financial Behavior

• Kids learn by observing their parents' actions more than listening to their words.
• Ideas to demonstrate financial responsibility: 
  • Share your own savings goals (e.g., for vacations or large purchases).
  • Practice delayed gratification and involve your kids in the decision-making process.
  • Teach budgeting by involving kids during everyday tasks like grocery shopping.

[13:30] - Tip #5: Teach Financial Concepts

• Start with simple concepts and build to more complex ones: 
  • Needs vs. Wants: Fun sorting games to help differentiate essentials from desires.
  • Budgeting Basics: Allocating money for saving, spending, and giving.
  • Compound Interest: How saving and earning interest can grow money over time.
  • Example: Saving $100 with 5% annual interest results in $105 the following year.

[16:15] - The Big Picture

• Speaker Eric reminds parents that saving isn't just about money—it’s about building discipline, responsibility, and long-term thinking.
• Highlight: Every small saving your child makes today is a building block for their financial independence.

[17:30] - What’s Coming Next

• Preview of next week’s episode: How to Teach Kids About Budgeting.
• Key questions to be answered: 
  • How can you explain budgeting to kids in a way they’ll understand?
  • How to teach prioritizing, planning, and spendin

Transcript

**Eric**:
Let me ask you something. What if I told you that the way you handle your money today could be a reflection on your child's financial future? Imagine this, your child years down the road confidently saving for their first car, or staying out of debt like it's the plague, and even investing for their dreams. Sounds good, right? But how do we get there? Well, it all starts with teaching them one simple concept called saving. In today's episode, we're diving into practical, fun, and solid ways to teach your kids to save money. And trust me, these are tips you'll wish your parents had shared with you. So let's hop into this episode, which is packed with creative and actionable steps that'll change the way your children think about saving money. Let's dive in 
**Introducer**:
Have you ever wondered why some people seem to have it all financially? Do well-off parents simply hand their children money? Or is there more to this wealth then? Welcome to Raising Financial Freedom, the podcast. We are here to talk about everything you never knew to teach your children when it comes to starting their financial future. The principles behind wealth and methods that are out there to teach your child about personal financial freedom. There is no real trick to earning other than learning. We are here to discuss, teach, and grow with you. Raising Financial Freedom, the podcast, with your host and concerned parent, Eric Yard. Let us get right into today's show.
**Eric**:
So, why is teaching children to save money so important? Well, let's take a moment to envision this. A 10 year old who learns to save for their favorite toy today grows up to be a teenager saving for a car. And eventually, a young adult is equipped to save for a house, retirement, or even starting their own business. Teaching kids about saving is a skill that pays dividends, not just financially but emotionally and financially. Eric Yard Studies show that knowing about money is key to a better life. Kids who learn about money early are less likely to get into debt later. They can handle emergencies, invest wisely, and think positively about money. Eric Yard By teaching kids to save, we're teaching them to be independent and responsible. It's all about helping them grow into capable adults. Isn't that what parenting is all about? But here's the catch. It's not just about telling kids to save. It's about showing them why saving matters and how it can benefit them in the long run. So how do we do it? Let's explore some actionable tips. Let's begin with the golden rule of any good habit. Start early. Kids are like sponges. They absorb the behaviors and lessons we expose them to. I can't stress this enough. The earlier you begin teaching them about saving, the more likely it is to stick. But here's the trick. Eric Yard You have to make it fun. Remember those classic piggy banks? They're still one of the best tools for teaching kids to save. For younger children, use a clear jar instead of the traditional piggy bank. It allows them to see their savings grow. Take a few coins, drop them in the jar with your child, and show them how it's growing. This simple act makes saving tangible and exciting. For kids who love to set goals, make it easy to see their progress. If they want a toy that costs $20, create a chart together. Every time they save a dollar, color in a part of the chart. This visual aid helps kids see how far they've come. Make saving feel like a fun journey, not just a chore. It's a great way to keep them motivated and excited about saving. When I was a kid, I wished my parents had given me a small allowance. But you know what you can do? You can give your children one and make saving fun possible. You can save money by matching their savings. For every dollar they save, you add 50 cents. This will teach them the idea of free money. And let me tell you, it's a concept kids never forget. Here's a little-known secret. Kids learn more from what we do than what we say. As parents, it's critical to model responsible financial behavior. Let's talk about how you can lead by example. Share your savings goals with them. Talk openly about how you're saving for a vacation. Let them see you set goals, budget, and work towards them. Practice delayed gratification. Show them the power of waiting. Instead of buying something expensive on a whim, involve your child in the decision-making process and explain why you're waiting to make the purchase. Involve your kids in budgeting. Next time you go grocery shopping, bring your child along and involve them in the decision-making process. Give them a small amount of money and ask them to make some choices. This helps connect spending to saving in real life. Teaching kids to tell needs from wants is very important. It helps them save money and think better. It also makes them better at making choices. Use the sorting game. For younger kids, make a game out of sorting pictures or items. Put a bed photo in needs and a toy in the day.
**Speaker 00**:
with motivation motivating kids to save can be as simple as giving them a little nudge in the form of rewards here's how you can do it celebrate savings milestones when your child reaches a goal like saving ten dollars acknowledge it celebrate with a small reward like a favorite treat or an outing to some place they like it reinforces the fact that they did something good consider educational rewards that will help even more instead of toys or candy consider books games or experiences that align with their interests and help them grow finally let's talk about teaching financial literacy as a lifelong skill this means teaching kids about budgeting interest and compound growth it's a big topic explaining interest in their money by using simple examples of financial literacy can be as simple as giving them a little nudge in the form of a little nudge in their money by using simple examples shows how money grows over time for example if you save 100 and earn five percent interest you'll have 105 next year teaching your kids about interest and showing how it grows will motivate them to seek it out and apply it to their savings let's take a moment to think about this every dime your child saves today isn't just money it's a lesson it's a brick in the foundation of their future financial independence remember teaching kids to save isn't just about dollars and cents it's about discipline responsibility and long-term thinking and speaking of long-term thinking next week we're taking this conversation one step further if teaching kids to save is the first step then explaining how to manage that savings through budgeting is the next big leap have you ever struggled to explain budgeting in a way a child can understand how do you teach them to prioritize plan and spin wisely without overwhelming them don't worry i've got you covered tune in next show as we tackle how do you explain budgeting to to a child trust me you won't want to miss it until then links to our article on teaching saving to you children are in
**Introducer**:
the show notes start them early so that they can thrive forever take care we really hope you enjoyed this episode of raising money with us thank you so much for watching and we'll see you in the next episode of raising financial freedom the podcast stay connected with us directly through raisingfinancialfreedom.com you can also join the discussion on social media which you can also find links on our website if you would like to speak with us please send us an email through info at raisingfinancialfreedom.com and as always thank you for pushing your mindset towards a better reality this concludes the most thought-provoking portion of your day don't forget to please like and subscribe to stay fully up to date until next time be kind to yourself and each other