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5 Steps to Teach Children to Save Money

Starting a saving habit early is a good start to instilling good money habits in children. Learn some of the steps to achieve it.

As an adult, we want to make sure our lives is comfortable enough by being financially stable. You will start to take note of your spending, you monthly savings, cashflow, and investment portfolio, as well as engaging with a Licensed Financial Planner to be able to achieve your financial goals. Now, imagine yourself as parents with children, how will you teach and encourage your kids to start saving money and paving way to build wealth and having a secure financial foundation from young age.

Even in school, children aren’t really taught about the benefits of saving money and some of us find that revelation only after experiencing financial hardships in our adult lives.

As parents, you have the responsibility and opportunity to empower our younger generation to start saving money, especially in these difficult times when economic recession and financial hardships are looming over us. Here are 5 steps to teach your children about saving money.

#1.  Initiate a conversation

The first step towards educating your child about saving money is to talk about money in general. The topic of money shouldn’t be scary or taboo. Include them in a conversation about money and ask them questions such as “are we comfortable enough” or “is debt bad?” to see their answers. From here, you can determine the level of their understanding about financial situation and tell them what we can do to improve our finances.

Give freedom to your child when it comes to saving some portion of their allowance. Children shouldn’t feel forced or burdened to save so much money, but you can encourage them by visualizing how much money they can grow over time if they save.

Reassure your child that you are always open and available should they want to talk about money. Let them know that any questions is a good question and that there is no shame in making mistakes. This will encourage a positive outlook and more healthy conversation about finances in a family. Parents can see this as a way to update their knowledge in order to answer all questions while keeping their priorities checked.

#2. Prepare a savings jar

The next step to teach your kids to save money is to give them a savings jar, or typically known as a piggy bank. This instrument is the easiest way when your kids can see their money adding up before their eyes, and this could motivate them to save more. The goal is to put their money, whether in Ringgit notes or coins until it is full. The money usually come from allowance or duit raya obtained during festive seasons. You could even start letting them earn small wages from you for doing chores or running errands for you.

This habit can help develop discipline and appreciation for the value of money at a young age. Remind them that it is not easy to earn money and one way to appreciate it is to save money. As parents, develop a habit to save money in you home, so it can be an example for your kids.

#3. Set up a bank account

Now that the savings jar is full, what should you do with it? It is recommended to open a savings account for your child. Aside from it being a safe way to store your money, it can encourage children to understand the amount of money they accumulate by saving.

Having an account is a great way for parents to teach kids about financial management. It also provides some motivation if they understand that the money will grow as long as they do not touch it and keep saving money in their account. Plus, it is a great way to save up for their college education!

#4. Be the model saver

Lead your child into a saving habit by being the example of the action. Keep a savings jar near your bed, your workspace, or even beside your washing machine. Add to your funds regularly. Whether it is a small notes or big notes, it counts. Make sure your child can see this and frequently remind them to fill their savings jar too.

When you are out shopping for groceries and other necessities, teach your child to discern between various prices and explained to them why buying one item makes better sense than another. For example, when you are picking for certain stuff, compare the prices between brands as you can have the same quantity at cheaper prices. Discuss about quality versus price. Help them understand how to make good decisions.

Reiterate the message when you receive your salary too. Every time you get paid, put aside a portion to prepare for a better future (and for times of emergency!)

#5. Create a timely money education

For kids, the concept of saving your money over time could be a hard thing to fully understand. In order for them to comprehend the concept is by creating a visible timeline – your children can see for themselves when they will reach their goal.

Start by getting a piece a paper and a pen or marker. Create a list of targeted goals for their savings in a week, months, and year. Start by listing down the smallest amount. For example RM10 for 10 days (RM1 per day). After they are comfortable and feel disciplined enough to save more, increase the goal and it will take off from there. Children shouldn’t be forced or feel they have to cut spending on necessary stuff like school lunches or stationery, but to save whatever amount they feel okay. The list is just to guide them in the process and making sure they have the vision of saving for the future.

Whenever an amount is saved, give a small reward, preferably non-money related like favorite food or their favorite book at every goals or checkpoint they reached. This would help to encourage a better attitude if parents take their time to congratulate children on their success in saving money every time they receive an allowance.


Yes, it may seem like a tough task to to teach kids how to save money. But, the trick is to make the topic fun and easily digested in child’s point of view. Saving is the basis of good finances and it’s about time to teach your children how to do it. Never mind if the amount saved is small but the actions is an investment of knowledge which can be beneficial in the long run.

How do you teach a child to save money?

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