Introducing children to the concept of saving is a pivotal step in fostering smart money management skills. Whether aiming for specific savings goals or simply cultivating the habit of setting aside a portion of their hard-earned allowance, encouraging your children to save can help set them up for a lifetime of financial stability.

In this blog, we'll use our “Piggy Bank Principles” to explore fun ways to teach kids about money and the fundamentals of saving.

Principle #1: Teaching the Value of Money

Money is an abstract concept—one that becomes increasingly harder to grasp as we move away from cash-based transactions to credit and debit cards, direct deposit, and digital wallets.

That’s why it’s even more important to take the time to help children understand the value of a dollar.

Piggy Bank Principles make learning about money fun for kids.

Each age group will have different capacities for understanding money based on their abstract-reasoning skills, math skills, and interests, but there are many fun activities you can do together as a family to boost your child or young adult’s financial literacy skills.

Activities for Preschool to Early Elementary School

Create a mock store at home: Set up a store where kids can “buy” and “sell” items using play money, suggesting appropriate prices. This also helps them understand the concept of transactions.

  • Role-playing restaurant: A spin on the mock store, you can also play “restaurant”, allowing your kids to play the part of customers or waiters, handling “bills” and “payments”—a fun way to teach them about pricing and budgeting.
  • Supermarket scavenger hunt: Give kids a small budget and a list of items to find in a supermarket. This teaches budgeting and price comparison.
  • Cooking cost activity: On its own or as part of your supermarket scavenger hunt, have kids work out the cost of ingredients for a recipe, then cook it together. This can be an introduction to budgeting and cost analysis.
  • Price guessing game: At the supermarket or at home, this easy activity is a great way to discuss value and spending. Simply show kids various items, let them guess the price, then reveal the actual cost. Consider rewarding them for accurate guesses for an additional incentive.

Ideas for Older Kids

Finance-themed board games like Monopoly or The Game of Life can introduce concepts of earning, spending, and saving in a fun environment, while granting some important family-bonding time.

Budgeting for a family event: Involve kids from upper elementary through high school in budgeting for a family event like a picnic, family night out, or birthday party. Give them a budget and let them make decisions on what to buy within that limit.

Family Yard sale: Involve kids in a family yard sale, from setting prices to handling transactions. It's a practical lesson in sales and value assessment.

Principle #2: Earning Money: More Than an Allowance

Encouraging children to certain basic household responsibilities, like helping to clean up after play or straighten up their rooms, can begin at a very young age. As your kids enter preschool, they can take on additional household chores beyond these basic duties—earning an allowance for their efforts.

Want to teach your kids about money? Start by including them in the budget conversation.

Establishing a consistent system of paying children for chores not only teaches them the connection between money and hard work but also fosters an understanding that their contributions to the household are valued. In addition to acquiring basic life skills through home care, they gain a regular source of income, providing an opportunity to develop the crucial life skill of money management.

Beyond earning money within your home, you can also help them build their entrepreneurial skills by running a lemonade stand, craft sale, or offering to assist neighbors and extended family members around their homes and yards.

Saving Those Hard-Earned Dollars

Understanding the effort it takes to earn a dollar is just one side of the coin. The other side is learning how to manage those dollars responsibly. As soon as your child starts earning money, it’s crucial to instill a habit of savings. Here are a few simple ways to jumpstart a routine of saving money—before spending.

  • DIY piggy banks: Have kids create their own piggy banks from recycled materials. This makes saving money more personal, while also encouraging sustainable and cost-effective choices.
  • Spend, save, give jars: Use three jars where kids can allocate cash they earn from chores (as well as gift money!) into saving, spending, or giving. This teaches them the math of money allocation. Regularly transfer the contents of their save jar to their own bank account (more on this later!).
  • Savings goal chart: Create a savings chart where kids can visually track their savings towards a specific goal, like a new toy or a book. Older kids can choose bigger goals, like a priced pair of shoes or video game.
  • Selling their older items: When toys or clothes are outgrown, assist older children in selling these items at a yard sale or consignment shop or other safe and supervised outlet, using the proceeds for a specific goal.

Principle #3: Sharing and Donating: The Joy of Giving

Focusing on saving money for one’s own wants and needs is critical for setting our children up for a stable and successful future. But fixating on what money can do for you and how you can build your own nest egg ignores one important financial lesson—not everyone has the same privileges that we do. An important part of any conversation about money is how we can use our privileges to help others.

"Money Doesn't Grow on Trees." -Dad.

As you instill other basic financial lessons into your children, sharing the spirit of generosity can be integral to creating a balanced approach to money management.

Simple Ways Children Can Give Back

There are many things children can do to incorporate giving into their financial management practices. Here are a few simple ways.

  • Raise money for charities: Whether participating in an established fundraiser or simply donating proceeds from your yard sale, raising money for charitable causes can not only help your children develop money management skills, it can also teach them the importance of giving.
  • Donating instead of selling: Holding a yard sale or selling off older items can be a great way to earn a few dollars. However, donating to clothing or toy drives or thrift stores that support charitable causes is a simple way to give back that can have a big impact.
  • Volunteering: Giving time can be just as valuable as giving money. Helping an elderly neighbor on a tight budget with yard work for free or volunteering at a local nonprofit like Blessings in a Backpack of Effingham, IL can show your children other ways in which their hard work is appreciated and can make a difference. To find other local opportunities visit VolunteerMatch’s listings for The Best Volunteer Organizations in Effingham.

Principle #4: Banks and Digital Money: The Modern Piggy Bank

By the time your child reaches elementary age, they probably have accompanied you to the bank on a few occasions—and may even have been the glad recipient of a lollipop or two. Bringing your children to a physical bank to open a youth savings account like our Super Green Savers Kids Savings Account provides a tangible connection to the sometimes abstract realm of financial management. And with incentivized savings programs for kids like our Super Green account, this experience can mark the beginning of a positive relationship between your kids and their banking institution.

Kids can learn about money and saving through everyday activities--make it fun!

However, today’s kids are growing up in a digital world filled with TikTok challenges and online spending temptations. It’s important to teach them how to manage their money using common digital platforms from budgeting and savings apps to online banking portals.

Digital Instructional Opportunities for Kids

Savings and budgeting apps for kids: There are dozens of apps that can help your kids create a budget, set and track savings goals, and some can even connect with their bank account to help them manage their money.

  • Investment games: Get kids engaged and interested in more complex financial topics like investing by taking advantage of free online tools like SIFMA Foundation’s Stock Market Game.
  • Give a demonstration of your online account practices: As your kids get older and are almost ready for their own more advanced accounts, take the time to give a demonstration of your online banking portal or digital banking app, as well as any budgeting apps or digital tools and services you use. At Dieterich Bank, children’s Super Green Savers Accounts are automatically rolled into our regular savings account, Save Green, at age 13.

Open a Super Green Savers Account with Your Child Today

Ready to help the child in your life start on the path to financial success? Our Super Green Savers Kids Savings Account is the perfect place to start. With .50% APY* interest on their balance and rewards every time they make a deposit into their account, our kids’ savings account can help reinforce the good behavior of saving.

Make an appointment at one of our locations in Dieterich, Effingham, Newton, St. Elmo, Breese, Edwardsville, Red Bud, Columbia, Waterloo, or Chester today to open an account for the child in your life!