9 May 2018

Teaching Children to Save

If you are interested in teaching your child to become a saver rather than a spender, then we have some hints and tips to help. Our children receive hundreds of messages every day, aimed at tempting them to spend their money. Social media, shop tills, television, billboards, magazines; everywhere they look there’s an image or message with a tempting offer. Understanding the importance of saving some of your hard-earned income is vital to good money management.

We hope that these tips will help you to guide your children from an early age to better habits for managing their pocket money and the early part of their career.

Wants and needs, understanding the difference

Being able to distinguish between something you want and something you need is one of the fundamentals of saving. Have you ever heard someone talk about something they need, when they are really talking about something they want?

Talking to your children about the difference can help them to make choices about what they spend their money on. We all need the basics, such as food, a roof over our head and clothing. We all have a list of things we want, which are not necessarily critical to our lives, however can be a reward from having a good saving habit. We have to decide how important these are and how to budget for them. Our children also need to understand these things so they can decide what’s most important to them and what will motivate them.

Children doing handstands

The money box

A piggy bank can be a great way to teach your young children about the importance of saving. Tell them that the aim is to fill it with coins until there is no room left. Explain that the piggy bank is for saving money for the future, and that the more they save, the more options they will have to buy the things they want. You could even help them to picture the reward by telling them they can use the money to buy something they might want in the future…such as a book or video game.

If you open one of our Saffron Ladybird Accounts, we will give you a free Ladybird Moneybox so you can store your money. Your child can then bring in their savings and let us look after them until you need them.

Allow your kids some money of their own

If you want your children to become savers, providing them with their own money gives them the chance to learn how to use it. One way to do this is to provide them with pocket money, or an allowance, in exchange for helping out around the house. They’ll be able to feel the rewards of their work, and get them used to making decisions about what to do with their earnings.

It might also save you from having to tidy their room and pick up the laundry!

Help them to set savings goals

Saving without a goal can seem dull and frustrating. Some things you want now, so why forego them? Helping your child to set a specific target will motivate them and create a sense of excitement as they move towards it. So it doesn’t seem too far away, you can break the target down into smaller goals, so they can see they’re at 25%, 50%, 75% of the way to buying the item they’ve been talking about for so long. Turning a big target into smaller goals will help maintain interest.

When we created our Children’s Regular Saver Account we wanted to bring it to life with little features to help. The welcome pack has some helpful things to get you started such as a Savings Chart, to remind you to save each month, where you can use the stickers to track how much you have saved and watch your money grow.

Throughout the year we get in touch via email with your child, or you via email to help you to keep on track with your savings. We will give you savings tips and tell you when we are having events, giveaways or competitions too.

Brothers on the beach

A dedicated place to save

Once your children have a target, they’ll need a place to save their cash. We’ve already mentioned a money box, but for older children, you may want to provide them with a savings account which serves two purposes, helping them to save and teaching them how banks and building societies work.

Encourage them to budget

Good saving comes from good budgeting. Part of being a better saver means knowing where your money is going, and you can see this if you have a plan, and save against it. If you ask your child to keep a note of their purchases each day and add them up at the end of the week, you (and they) might be shocked by how they are spending their money.

This can help them to think about the ‘needs versus wants’ conversation and to adjust their approach to savings.


People save into an employer’s pension because the company contributes and you get money back from the government in the form of tax relief. This is an incentive. So try the same approach with your children; you can say you’ll contribute 25%, for example, towards the price of that new bike they want if they can save 75%.

Don’t be too harsh with mistakes

Everyone learns from their mistakes. Your children may make an error and raid their savings to buy something they really want, having decided they weren’t prepared to wait. It’s tempting to step in and deter them, but it can be better to use their impatience as a way to learn. If they see that the thing they really wanted has now moved further into the future then they will have seen at first-hand the effect of deviating from their plan.

It’s also important to accept that we all change our plans from time to time so the decision could be for a good reason. Setting immovable lines and rules can create problems when the environment changes so having a regular and honest conversation helps.

Lead by example

Children will obviously follow your example. Saving is difficult when we’re trying to pay the bills and meet the cost of living in uncertain times. But we know from experience that putting a little away each month can help plan for the future with more confidence and certainty.

We offer free savings reviews in our branches, you can pop in to meet with one of our consultants, and together we'll take a look at your options over a cup of tea and a biscuit.

Want to know more?

You can find more information about our savings accounts online, by popping into your local branch or calling our contact centre on 0800 072 1100 and one of our staff will be more than happy to help.