Learning to save is hard.
Hard for grown-ups. Harder still for kids.
But do you know what saving is? It’s actually preparation for future spending. Or it’s insurance, protection against future debt. Your choice, but with the same result, which is greater financial health.
So when does delayed gratification become something a person actually wants? I have no idea. But I do know that the trait doesn’t necessarily come easily and grows best with faithful practice.
So how can you, as parents, help your kids learn how to save? Below are four tips, in sequence, to get you started:
Know what you’re saving for…name the reason
Saving is a major investment, a major form of delayed gratification, so it’s good for your kid to know from the beginning why they’re going to be working so hard and why they’ll be sacrificing more immediate pleasures in the short-term. It’s an abstract concept that they will gradually mature into, and you get to walk with them through that process.
A great teaching moment is when your kid asks for a non-essential item. You can say, “Sure!” (Will that shock them?) And then you add the caveat, “You can buy that (video game, pair of designer sneakers, snowboarding pass, plush toy….fill in the blank) with your own money.”
You’ll quickly learn if your kid was serious about that item or if the desire was a fleeting fancy. But if they look crestfallen and you can see the asked-for-thing has the potential to be appropriately important to them…see step #2.
Is It Big? Partner With Your Kids!
If it’s a big thing, partner with your kids on the cost. Many financial dreams are out of reach for young ones, but if it’s something valuable to the kid that you know they will invest in or appreciate for a healthy amount of time, why not join forces with them in order to make it possible?
When my sister was 9, she really, really, really wanted a dog. But a dog is a lot more than a dog. A dog is vet bills and food and flea treatment and a fenced yard and structuring vacations around whether you’ll need dog-sitting or not. In other words, a dog is a big investment, especially for a 9-year-old alone.
So my parents made a deal with my sister. If she earned the money to pay the adoption fee at the Humane Society, they would complete the fencing necessary to enclose the backyard. (You may notice the significant financial disparity here, but my parents never mentioned how much that fence would cost to my sister. There was no guilt-tripping. They just wanted to see if she was serious about taking on the responsibility of caring for a dog, and the best way to measure that would be her effort in earning the money for adopting the dog.)
Well, my sister attacked the task with gusto. After brainstorming options with my parents, she settled on becoming a cookie baker. (Guess who supplied the cookie ingredients and the electricity to run the mixer and the oven? Yep. Remember, she was only 9. If she’d been 15, the conversation would’ve factored in expenses, I’m sure.) So she made up order forms with the selection of cookie types she knew how to make and distributed those forms to friends, family, and church members.
The response was amazing! My sister baked and baked and baked and knew exactly how many dozen cookies she needed to sell to earn just enough money for the adoption fee.
It was a major family celebration when we all went to the Humane Society and helped my sister pick out her dog. After that initial effort my sister invested in dog ownership, additional investment in terms of time and bonding and training were just par for the course, a natural extension of the path she’d chosen. The pair of them (girl and dog) went on to win 4-H state championships in both dog obedience and showmanship two years in a row when my sister was in high school.
Provide Your Kids With Opportunities to Earn
Until your kids are in their early teens and their options for earning money by working for others expand, parents are usually the primary employers. It’s your challenge to come up with tasks that are deserving of payment.
In every family, there are the daily and weekly tasks which all household members need to participate in just to cover basic living needs. These generally should not be paid tasks for kids. If it’s a task they’re going to need to know how to do so they can live on their own eventually (wash dishes, cook meals, do laundry, tidy their things, mow the lawn, clean the bathroom, etc), then you’re teaching them life skills and they do not need to be paid to learn those things.
However, if you, as parents, can find some extra things around the house that you would normally pay (or would seriously consider paying) someone else to do and provide those to your kids as earning opportunities, that would be great. This will look different for every family, but might include tasks like washing and detailing the vehicles, mowing a larger piece of property, painting, pressure washing, heavy-duty cleaning, sorting and organizing the garage or the pantry, landscaping, changing the oil on your vehicles, helpful manual labor that is age appropriate while working alongside you on a project, etc.
Kids are also great at reselling, so if you (or they) have extra items you no longer use, you can offer your kids a commission on every sale that they facilitate through identifying the item, taking pictures, writing descriptions and posting on social marketplaces for you.
Win-win for everyone!
Celebrate!
Celebrate with your kids when they’ve accomplished the goal!
One of the greatest gifts parents can give their kids is completion–the seeing through all the way to the end of a commitment to hard work, so that the kids also experience the fruit of their labors, the reward. This type of celebrating–intentionally taking time to recognize the effort as well as the result–is what lays the foundation for your kid’s future ability to practice self-discipline, their future motivation. You have to show them that the end result is worth all the work that it took to get there. So let them see you happy! Dance around the living room together. Hoot and holler. Go out for ice cream. Cook a special meal. (Choose the new furry family member together.) Whatever it takes, share in their joy of completion.
Tina Birch
Tina, one of Birch’s financial literacy counselors, meets regularly with our participants to discuss how to make progress toward their financial goals. She loves taking a values-driven approach to decision-making and stewardship. She is also an avid reader and writer, so we are excited to have her share her knowledge about financial literacy with us.