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Money-Smart Kids: 10 Tips to Teach Saving for Goals

Updated: Jan 21

As an educator focused on teaching kids the basics of personal finance, I’ve seen firsthand the incredible impact that early financial education can have on children. In this blog, we're diving into the art of teaching kids about money management, specifically how to save for their goals. It's an essential skill that not only prepares them for adult life but also embeds a sense of responsibility and achievement from a young age. Let’s explore ten practical tips to make your child a money management whiz!


Table of Contents


parent teaching kid about money management

1. Start with the Basics of Money

Understanding the Value of Money

It's crucial to begin with the basics. Teach your kids what money is, how it's used, and its value. Start with fun activities like identifying different coins and bills, and explaining what each is worth. This foundation sets the stage for more complex concepts later on. You can also learn more in our long-form article discussing the fundamentals of money management for kids!

  • Key Point: You don’t need to use real money for this learning - there’s plenty of options for play money that looks just like the real thing!

  • Activity Idea: Create a game of matching coins and bills with their values.

parent helping child understand goals and money

2. Set Clear, Achievable Goals

The Power of Goal Setting in Money Management for Kids

Kids are more motivated to save when they have a specific goal in mind. Whether it's a new toy, a book, or a contribution to a family outing, having a clear objective makes the concept of saving more tangible and rewarding.

  • Key Point: Help your child set a realistic and attainable goal.  Identify something they like they will take them a little bit of time to save up for!

  • Tip: Use a goal chart to track progress visually.

a childs piggy bank and saving jar

3. Create a Savings Chart or Jar

Visualizing Progress

A savings chart or a jar can be a fun and effective way to track savings. It’s a visual reminder of their goal and how close they are to achieving it. Plus, it adds an element of excitement each time they add to it.

  • Key Point: Visual aids can greatly motivate kids in their saving journey.

  • DIY Idea: Decorate a savings jar or create a chart together.

a mom teaching money management through groceries

4. Teach the Difference Between Needs and Wants

Essential Money Management Lessons

One of the most valuable lessons in money management for kids is understanding the difference between needs and wants. It's a fundamental concept that guides smarter spending decisions.

  • Key Point: Regularly discuss examples of needs (like food and shelter) versus wants (like toys and games).

  • Activity Idea: During shopping trips, ask your child to categorize items into needs and wants.

kids savings jars

5. Allocate Allowance Wisely

The First Step in Budgeting

If your child earns an allowance, guide them on how to allocate it. Encourage them to divide it into spending, saving, and perhaps even donating. This early introduction to budgeting is a crucial part of money management for kids. 

We do specifically call out “earn” an allowance here.  We definitely believe that kids should earn their allowances by providing value to the house.  How that is done is totally up to the parents!  Simple things like cleaning up the dishes after dinner are the easiest to start with though!

  • Key Point: Encourage a balanced distribution of allowance.

  • Suggestion: Use labeled jars or envelopes for each category.

mom and child learning about compound interest

6. Introduce the Concept of Compound Interest

The Magic of Growing Money

Although compound interest might seem like a complex topic, it can be simplified for kids. Use examples to show how money can grow over time when saved, emphasizing the benefit of being patient and consistent.

  • Key Point: Simple examples can effectively illustrate the power of compound interest.  Use these to show kids how saving early leads to huge growth over time, allowing their savings to be worth much more in the future!

  • Tool Tip: Use online calculators or apps to simulate interest growth.

kid getting ready to clean while learning about money

7. Encourage Earning Through Chores or Small Jobs

Linking Effort with Reward

Teaching kids that money is earned is a valuable lesson. Encourage them to take on small chores or tasks for a bit of extra cash. This not only teaches them about work ethic but also the value of money.

  • Key Point: Money earned through effort is appreciated more.

  • Idea: Create a list of chores with corresponding earnings.

money management app for kids

8. Utilize Technology and Apps

Modern Tools for Money Management for Kids

In this digital age, there are numerous apps and tools designed to make learning about money fun and interactive for kids. Just ensure to guide them on safe online practices.

  • Key Point: Technology can make learning about money management engaging.

  • App Suggestion: Look for child-friendly budgeting or savings apps.

dad teaching kids about money management

9. Discuss Financial Mistakes and Learn from Them

Building Financial Resilience

It’s important for kids to understand that everyone makes financial mistakes. Share appropriate stories of your own or famous ones, emphasizing the lesson learned rather than the blunder itself.

  • Key Point: Mistakes are opportunities to learn.

  • Advice: Encourage open discussion about money matters, including setbacks.

parents showing kids their own money management

10. Lead by Example

Parents as Role Models

Your approach to money management greatly influences your child. Be mindful of your spending, saving, and talking about money. Show them through your actions how to manage money wisely.

  • Key Point: Kids learn a lot by observing their parents.

  • Suggestion: Involve your child in some of your financial decision-making processes.


Teaching your kids about money management is not just about saving money; it’s about instilling a sense of responsibility, discipline, and planning for the future. Remember, patience and consistency are key in this journey. Celebrate small victories with your child and keep the learning process fun and engaging. And if these items were a little too mainstream for you, then take a look at our article 10 creative ways to teach kids about saving and investing to find some new inspiration!


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