10 best ways to save money — a guide for kids

Teaching kids how to save money is a valuable life skill that can set them up for financial success. With a few strategic approaches and practical tools, parents can help kids understand the importance of saving and how to do it effectively. Keep reading for the best ways kids can learn to save money

Start with a piggy bank

Introducing a piggy bank is a classic and simple way to teach young children about saving money. It gives them a tangible experience of putting money away and watching their savings accumulate. Encourage your child to save coins and small bills, explaining that saving money now means they can buy something special later.

Open a savings account

For older children, opening a savings account in their name can be an exciting step toward financial independence. Many banks offer youth savings accounts with no minimum balance and no fees, making it an attractive option for kids to see their money grow. Teach them how to make deposits and monitor their account balance, either online or through bank statements.

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Set savings goals

Help your child set specific, achievable savings goals. Whether it's saving for a new toy, a book, or a contribution toward a family outing, having a clear goal can motivate them to save consistently. Discuss how much they need to save and how long it might take to reach their goal. Make it easy and fun with tools like Greenlight’s cashback savings, which offers kids incentives for saving money. 

Use visual aids

Kids often benefit from visual aids that help track their progress toward savings goals. Create a chart or a progress bar they can fill in as they save. This visual representation of their efforts can be incredibly rewarding and encourage them to keep going.

Teach them about interest

Explain the concept of interest in simple terms: You can earn money on the funds you keep in a bank. For example: If a savings account offers a 2% APR, you could earn $1 for every $100 you save. Add compound interest into the mix and show them how their savings can grow over time with the addition of interest, reinforcing the benefits of saving over spending.

Encourage earning

Encourage your child to earn money through chores, helping neighbors, or selling crafts. This teaches the value of hard work and gives them more opportunities to save. Discuss different ways they can earn money and support their entrepreneurial endeavors.

Lead by example

Children learn a lot by observing their parents. Demonstrate good saving habits by discussing your own savings goals and how you’re working to achieve them. Share your successes and challenges, making it a family journey toward better financial management. Sign up for Greenlight’s $mart Parent newsletter for money tips, insights, and fun games you can share as a family.  

Discuss wants vs. needs

Kids must understand the difference between wants and needs. For example, they may want to go to the movies but you need to put food on the table and pay for electricity. Have regular conversations about making wise spending decisions and prioritizing needs over wants. Creating a weekly family budget can help kids visualize what that means in practice. This lesson is foundational for effective money management throughout their lives.

Consider matching contributions

To further incentivize saving, consider offering to match your child’s contributions to their savings account up to a certain amount. This not only boosts their savings but also shows your support for their financial goals.

Provide resources and education

There are numerous books and online resources designed to teach kids about money management. Invest in age-appropriate materials that can make learning about finance fun and engaging.

For example, the Greenlight app provides financial education and resources such as: 

• Level Up: Fun games that teach kids money skills

• Learning Center: Fresh ideas about kids, money, and parenting

• In-app learning: Kids learn money management and investing fundamentals 

By implementing these strategies, parents can help their children develop a healthy relationship with money from a young age. Saving becomes not just a financial strategy but a stepping stone to achieving dreams and securing a stable financial future.

Visit the Greenlight Learning Center for helpful resources on all things family, finance, and fun.

This blog post is provided "as is" and should not be relied upon as a substitute for professional advice. Some content in this post may have been created using artificial intelligence; however, every blog post is reviewed by at least two human editors.