5 Tips for Teaching Your Child to Save Up for Purchases

4 min to read

“I want that!”

How many times have you heard that when you go to the store? If you are a parent, chances are you hear that refrain far too often. Even when your child is old enough to start saving up for purchases with his or her allowance or birthday money, it’s still a battle to convince him or her to wait. Children seem to spend any money they get on the first object seen.

Teaching your child to save up for purchases requires consistency and the ability, sometimes, to say no. Here are a few tips for helping your child learn the value of saving up for something they want:

1. Talk About Money

First of all, you need to make sure that you are talking about money in front of — and with — your kids. Discuss purchases you plan to make as a family, and talk about saving up. My husband and I frequently talk about saving up for a new laptop, or for a trip, in front of our son. When appropriate, we even include him in our conversation.

While younger kids might not always completely understand what’s going on, the important thing is that they get used to the idea of planning how to use their money, and they know that you do the same thing. It made a world of difference when my son realized that we don’t just run out and buy whatever we want whenever we feel like it. When he saw us planning ahead for our own purchases, and he realized that this is “what adults do,” it was much easier to encourage him to save.

2. Watch it Grow

Young kids, especially, like to watch their money grow. When my son was younger, he received a clear jar for his money. He was able to watch it grow. Seeing that stack of coins and bills rise was a thrill for him. Now that he’s a little older and has a concept of numbers, he doesn’t need the visual (although he still enjoys having it for his short-term spending goals). We put his long-term savings in a high-yield savings account, and money he earns from helping me in my home business in a Roth IRA. He can watch the compound interest, and he really likes the “free money” he gets over time.

Make it fun for kids to watch their money grow. Point out how it’s growing, and that they have a few more choices when it adds up like that.

3. Use Reminders

When my son was saving up for a toy a few years ago, he had a hard time staying focused. So, when he saw something else in a store and wanted to buy it, we asked him this question: “Do you want it more than X?” This reminded him that he had a goal. After some thought, he usually decided to wait and save up for the purchase.

Visual reminders can also help. For a long time, my son put a picture (cut from an ad) of a video game he wanted for his DS on the wall to his room. Every day, he looked at that picture, and it reminded him of what he was saving up for. With his goal in mind, it was easier for him to stay focused.

You can also use charts as reminders. Create a grid or something similar and color it in, or use stickers, as your child approaches his or her goal. It’s a fun reminder to save up.

4. Be Realistic and Help Out

Don’t forget to be realistic about what your child can accomplish, and help him or her out. A five-year-old getting two dollars a week will be hard-pressed to save up for many toys. Consider meeting halfway, or scaling down what it takes for him or her to get the toy.

In other cases, sometimes you just need to say no, and encourage your child to choose a less expensive purchase. But, in the case of young children especially, you need to make sure that the purchase is achievable so that they get the thrill that comes with saving up for a purchase.

5. Let Your Child Make Small Mistakes

One of the best things we did was let our son make a small impulse purchase. We reminded him of his goal, but the impulse purchase would not be denied. We let him make the mistake — and experience buyer’s remorse. We talked about how he felt a few days later, and about how much it set back his effort to buy what he really wanted. He shows more self-control now.

It’s not always easy to teach your child to save up, but it’s worth the trouble when you see them making responsible financial decisions.

Miranda Marquit is a freelance journalist specializing in topics related to personal finance, investing, and entrepreneurship. She writes regularly for a number of web sites, including AllBusiness, Huffington Post, and Wise Bread. Miranda’s work has been published at U.S. News & World Report, MSN Money, Fox Business, and Business Insider. Her work has been linked to from USA Today, the Washington Post, and the Wall Street Journal, and she has appeared on NPR Morning Edition and American Public Media’s Marketplace