It takes a village: Tips for teaching your kids to save

You are your children’s first and best teacher. You teach them how to talk, how to read — how to exist in the world.  

That education should also include good money management. But where to start? Here are a few quick tips from our staff of experts to give your kid a strong base of financial knowledge.  

It’s never too early  

Whether in a piggy bank or a bank account, it’s never too early to start saving. For younger children, you can get them used to money handling by practicing small transactions with them and using those moments to teach concepts like counting change, budgeting and general money management. Here’s how a few of our team members approach early financial development.  

• “It’s never too early to start conversations! We have a shop toy that we use to help make learning about money and spending smarter fun with our toddler.” – Alyssa  
• “It’s never too early to open your kids an account or two, teach them how to save for the future and allow them to spend their own money on that new toy or game they’ve been eyeing! Sometimes my parents would offer to match funds, which was a huge motivator for me as a kid!” – Brooke  

Emphasize the importance of saving  

There is zero downside to saving early. Sure, kids of any age might not save every penny they’re given or earn. But building the habit of putting a small portion of any paycheck, allowance, birthday gift, etc., into savings is best started early.  

Consider opening a minor savings account sooner rather than later to help them get started on the right foot. That said, not every financial institution’s savings accounts are equal. Be wary of fees that may drain your child’s savings account. Find an account that has no minimum balance or deposit requirement and earns interest — for example, our Ignite Savings account.  

Here are a couple of comments from our experts about how saving early positively impacted them.  

• “I still remember opening my first savings account at the age of four. It created a lifelong appreciation for savings (for the short term and the long term).” – Tiffany  
• “I love that my mama helped me set up a savings account as soon as I started babysitting as a preteen! Would highly recommend all parents do this!” – Laura  

Wants vs. needs is the key to teaching budgeting  

Teach your young ones the difference between a want and a need so that they will build healthy habits for the future. In the words of our team:  

“Explain the difference between needs and wants. There are so many things that we think we ‘need,’ but it is most important to have all the things we truly need and then set up savings goals for the things we want.” – Gina  

For example, specifying things like food, shelter and medicine as needs. And other things like the latest cellphone, trendiest apparel and newest game as wants. The biggest reason this distinction is important for budgeting is that it helps ensure that kids know they have to prioritize what they spend their money on first. As adults, we know it’s better to have rent paid and a full fridge than the latest electronics and concert tickets. But kids and their developing brains don’t have it quite as easy.  

Have a savings goal  

Savings goals are one of the best ways to teach budgeting, saving and spending all at once. Identify an item that your kid wants and help them save toward it. If it’s an expensive item, consider matching their savings contributions. For example, for every dollar they put in their piggy bank, offer to put in 50 cents.  

For younger kids, consider starting with a small savings goal, around $20, to help boost their confidence!  

• “Always have a savings goal, take a portion of all the money you get and put it toward your goal!” – Jamie  
• “We gave my grandson a bank when he was three. He started saving money he would earn for his upcoming trip to Disneyland with his mom and dad. He was very proud that he had his own spending money for the trip.” – Jennifer  
• “I was never taught finances or to save as a kid. Both of my children now have OCCU savings accounts and are learning to save for the future (cars, college, etc.). They love bringing in their full piggy banks and seeing the coins go through the coin counting machines!” – Kayla  

• “Growing up, any time we received money, we had to put half into ‘long-term savings’ and the other half we could budget however we wanted. It definitely made me understand the importance of having a system that automatically labeled funds for future use. The savings came in handy for college room-and-board, and the habit has helped me save for larger endeavors, like a down payment for a house.” – Kim 

  Make it fun!  

Most importantly, make it fun! Find a piggy bank with their favorite cartoon character or animal and bring it into the credit union when it’s full. Make an event out of it by rewarding them for saving – it can be a small treat and a way to spend time together.  

Open an OCCU Ignite Savings with your kid to help them start off on the right foot.