Four ways to teach your kids how to save

Help your children build a nest egg

Iona Bain – Virgin Money Living Mentor

by Iona Bain | Independent Money Mentor

Founder of the Young Money Blog and author of Spare Change

It’s hard enough getting children to make plans for ten minutes’ time, let alone ten months or even ten years into the future. Saving is a life skill we all need, but how do you pass it on to your kids? With a few tricks up your sleeve, you can make it easy and fun – even for those whose attention span barely stretches through the opening credits of Paw Patrol. Here is how to gamify saving and help your kids get to grips with this crucial subject. One day, they might even thank you for it. 

Detective time – getting a grip on cost

Ask your kids to discuss the goals that they’d like to save for in the future. They can be big or small – a combination of the two is ideal. Suggestions to get the ball rolling include a new toy or a new pair of trainers; or for older kids, a university degree or a car. How much money will these goals each cost? Get them to find out. Then find out for yourself and compare and contrast your findings. Does your child have a good idea of how much things cost? Were they shocked when they found out the eye-popping cost of trainers or a university education? How do they think they’ll get the money together to pay for things? Having a chat about the cost of stuff helps your kids understand why it’s important to save. This is a good approach for those children with a more analytical, inquiring mind. 

Picture this – visualising goals

Get your kids to draw pictures of the things they want to save towards. Then put this above their bed so they are reminded of it every day. You might want to draw in a thick bar under the more realistic savings goals, like new toys. Every time they add to their savings, colour in more and more of the bar until finally they can afford to buy it. This is a great savings technique for children who like to learn kinetically. 

My First Bank – have fun with role-play

Why not create a mini bank branch in your home? You just need a piggy bank or a safe for the money, and you can get your kids to mock up a branch desk with some cardboard boxes and other bits and pieces. When your child gets their first allowance, or maybe some money from granny for Christmas, they can visit the bank and you can act out the role of the bank manager, taking their cash and putting it in the safe (or piggy bank). If they want to deposit or take out cash, they’ll have to make an appointment with the bank manager (you) and talk things through. 

Go online to bring saving alive

There are plenty of online accounts available to help tech-savvy kids save. The GoHenry app, for instance, offers a Savings Goal feature, which helps your kids figure out how much they need to squirrel away to pay for certain things and then automatically transfers a weekly amount into a separate savings account they can’t spend prematurely. Likewise, Qwiddle turns saving into a fun, interactive process with an app that sounds like a sport involving wizards. Importantly, the app allows you to monitor your kids’ saving from afar.

TOP TIP: If you decide to open a young savers account at a physical bank like Virgin Money, make a day of it so your kids have positive memories of going to the bank. Give them a treat afterwards or go for a picnic so they’ll always look forward to it.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.