Sticky Money and Savings Skills for Kids

Education 2 min read

09 Oct 2020

There are a number of skills which we develop as children which tend to stay with us for life. Things like riding a bike, using a hula hoop or learning how to skip are important rites of passage. And the earlier we learn how to do these things, the easier they seems to be to learn (as any adult who has picked up a hula hoop for the first time can attest).

Developing a positive relationship with money isn’t too dissimilar. Indeed, research in the UK has highlighted that our money habits as adults are set by the age of seven.If we develop good money habits at an early age, these tend to be ‘sticky’ and stay with us as we get older. And as with any habit, poor practices are much easier to correct at an early stage, than waiting until they are deeply embedded.

Teaching children about money and saving at any early stage can not only set them up for the future, but it helps them to develop important planning, budgeting and money management skills. These will be important building blocks needed throughout their lives.  
As the world becomes increasingly digitised, and more and more of our financial transactions take place online or via debit/ contactless payments, it becomes even more difficult for everyone to get a grasp of their finances Helping children to understand how money works and to develop smart money habits becomes even more important.

Here are eight tips to help you getting your little ones off on the right path.


  1. Start your children saving early

Everyone is different, but the earlier children can learn the concept of saving the better. Skills are developed over time and introducing the concept early on can increase the likeliness of it staying with them in later life.

As soon as your child can count, you can introduce them to money. Teach them the value of notes and coins and help them to identify each.

  1. Explain the concept of money and saving

There are various and fun ways to engage with your children to help educate them on the concept of saving money and how to works. Playing shop with them with money involved can really help them see how to works in a real-life scenario.
It’s also important not to focus simply on cash and coins, but also to explain how money can be moved electronically or online. If you are making an online payment, let your child watch how the transaction is made and explain how the money is taken from your account. It’s also a good opportunity to talk about not sharing your account or card details with anyone, in the same way that you’d encourage them to keep their notes and coins in a safe place.

  1. Set up your children’s saving goals

Creating clear savings goals can help keep your children’s saving on track, allow them to see the potential fruit of their labour and give them a sense of achievement when they successfully reach a milestone. It also helps to make the concept of saving more tangible when there’s a reward awaiting them at the end.

  1. Manage your children’s pocket money

Giving your children pocket money can give them a great sense of independence, and managing it in terms of how much and how regular can be different for everyone. Splitting it up into different areas for them can help them learn how to manage different areas of spending – e.g. treats/savings/essential items.
Don’t forget to remind them of the importance of charity or helping others. Encourage then to set aside a little for children who are less fortunate than they are. You might make it a ritual to then donate this money (perhaps topped up by yourself) to an appropriate charity or cause.

  1. Lead by example

Children are sponges and absorb everything – so your actions with how you handle your money can be impressionable. Try to be careful in how you refer, treat and keep money in their presence. If you aren’t concerned about taking or checking your change in a shop or you leave money thrown around the house, this may give the wrong impression to children.

  1. Let children make mistakes with their savings

As the saying goes, the only way to learn is from your own mistakes. Although it's not ideal they splurge all of their money, sometimes it is good learn they will have nothing if they aren’t careful with it. If you simply top up their pocket money each time they spend it, it can give the impression that there’s plenty more where that came from. Helping to embed the message that there are choices to be made and each choice has a consequence, is a great financial lesson to teach.

  1. Reward children for reaching consistent savings goals

If your children hit consistent savings goals, incentivise them to keep going by giving them a small bit of additional pocket money. It's a good motivator and helps to embed the idea that money you save can grow.

  1. Open a children’s saving account

A children’s saving account will give children a sense of importance, responsibility and add a ‘real-world’, feeling to their savings. The credit union, with its personable, community based, and is a perfect place for children to open their first savings account. Take the first step to help your children save – contact your local credit union and open a children’s saving account today.

If you've got Money on your Mind and you need some guidance or further information, check out our Money on your Mind series. You'll find insights, tips and suggestion to help you to feel more knowledgeable about and in control of your financial situation.