Making Household Savings Fun for Kids

Adam, my neighbors' eight-year old boy, likes to save money. In fact, he likes to save money so much that I often see him singing in his yard (and dancing!) about all the cash his parents are saving. From drying laundry on the clothesline to washing the dog in the backyard, any small feat of household savings sends him into a Broadway-esque performance.

After the last performance I witnessed (in which Adam belted out, "We're saving money! We're saving muh-ah-ney!" while he helped his mom wash the car in the driveway – much to his mother's embarrassment), I had to ask his mom Tina how she made him so exuberant about plugging the piggy bank.

Tina's response was pretty simple: she talked to Adam about money. She told him that if they saved here and there, they could buy some of the things the family wanted. For Adam, knowing that the money saved during driveway car washings helped the family afford a puppy was all he needed to hear: he would save money in any way to ensure he could keep his dog well-fed and happy.

This simple response made me think a little harder about the best ways to encourage kids to save, and I researched a little more in depth. Here's what I found:

Parental Involvement

First, just like Tina mentioned, talking to children about the fluidity of household finances can help them see that shutting off those lights will leave more cash available for fun things later on. Of course, for kids to understand that the small savings in energy costs can equate to more money in the bank, children must understand that there is only so much money available per month.

The best way to explain money to kids is in simple terms. We discussed in "Teaching Children to Save" how to introduce them to savings and money ideas as they pertain to physical cash, and those are great building blocks for the discussion about saving on household bills.

Once children are familiar with these ideas, you can introduce them to more advanced savings ideas. The following are some ways to introduce household savings to kids:

  • Tell them about salaries: To begin, you can tell kids where money comes from. You do not have to go in depth, but letting them know that your employer pays you a salary and that the cash can only go so far every month is a great first step.
  • Show them where money goes: For this idea, you do not have to pull out your bills, but telling kids about what costs money around the house can help them understand the idea of bills. For example, letting your child know that you pay for electricity can encourage her to mind her energy usage. As my mother used to say when I stood in front of the open refrigerator, "We're not cooling the neighborhood!"
  • Connect saving on bills to buying something they want: This step is often where kids embrace saving money, like my exuberant neighbor. Your kids may not ever sing the savings praises like Adam – he is an extremely outgoing boy – but they may just close that refrigerator to make more room in the budget for an iPod.

Showing your children how household savings leaves more room in the budget for other items may at first seem like a lost cause. But introducing them to money concepts, household finances and bills can help you introduce the ideas of saving for larger items.

How about you: How do you encourage your kids to save on household bills?

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Mother's Day 2011 Blog Roundup wrote:

Sun, 05/08/2011 - 13:50 Comment #: 1

[...] Vesting – Making Household Savings Fun for Kids.Teaching your kid about finance is [...]

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Jackie wrote:

Sun, 05/08/2011 - 18:21 Comment #: 2

I usually connect it to something they want to do, for instance summer is coming and they love to go to the beach and swim. There is an entrance fee for our local beach. I tell them if they want us to have the extra money to go swimming, we need to do things like make sure we turn out the lights and turn off the water while you brush your teeth.
I also have them save money for things they want to do like go to the corner store for penny candy. They can earn thier pennies by keeping their rooms clean and their toys picked up.

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Christa Palm wrote:

Tue, 05/10/2011 - 16:05 Comment #: 3

Hi Jackie! Great tips -- saving for fun trips and excursions is an awesome way to motivate the little ones!

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Tue, 11/15/2011 - 17:00 Comment #: 4

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Christa Palm wrote:

Thu, 11/17/2011 - 23:23 Comment #: 5

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The Kids-and-Finances Guide for Parents | MomVesting wrote:

Thu, 01/19/2012 - 21:45 Comment #: 6

[...] If your kids are resistant to the idea of saving here are some activities to make the idea of saving enjoyable. [...]

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