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How Do I Teach My Kids How to Save?

It’s crucial to teach your kids how to save from a young age. My dad, Dave Ramsey, and I discuss this in our best-selling book, Smart Money Smart Kids.

In this excerpt of the book, we tell you about a six-year-old boy who learned about the importance of saving for a goal!

It’s a great feeling to set a purchasing goal, work hard over time to reach it, and then actually buy the item. That feeling is magnified when it comes to your kids saving for their own purchases. There is an enormous sense of accomplishment for a child when he walks into a store and makes a significant purchase with money that he earned himself. Something inside him lights up and shouts, Look what I just did! Having Mom and Dad alongside, cheering him on, adds to the thrill because he’s so proud of what he’s achieved.

Help your child pick out a toy, movie, video game, or other item that he wants, and if it’s in a reasonable, attainable price range, encourage him to set a savings goal to buy it. Remember, kids are incredibly visual, so print a picture of the item and tape it to the refrigerator next to his chore chart. As he works toward it for the next few weeks, ask him how it’s going. Knowing that you are excited for him can keep his motivation level high as he puts money into the Save envelope every week.

Then, once he reaches the goal, make it a celebratory trip when going to the store to buy the item. Occasionally, if you’re able, you might even add a special surprise to the purchase. For example, if your son saves up and buys a video game, maybe you could surprise him with a new controller. Or if the item he wants is really out of his price range, you could offer to match his savings on a big goal. You shouldn’t do this every time, but sometimes it can be a fun way to celebrate with and encourage your child.

A friend recently told me about a six-year-old he knows named Drew who set a major savings goal—and completely dominated it! Drew had spent some time playing with an iPad Mini in a store while his parents shopped. He decided then and there that he really wanted one. His parents saw that he was serious, so they sat down and explained what a big goal it was and how long it would probably take to save enough money for the purchase. Drew was so determined that his parents knew they needed to make this a major learning experience. They told him they’d match his savings dollar for dollar on an iPad, but he’d have to come up with his half on his own. Being only six, Drew wasn’t making a fortune in commissions, but he got creative and found new ways to make money. When his birthday rolled around, he told his whole extended family that he only wanted money for the iPad. That meant no toys, games, or other gifts. For a six-year-old, not getting a single toy on your birthday is a big deal, but he was focused on his goal.

Drew was still seventy dollars short one night when his parents saw that the local retail store had discounted the iPad Mini he wanted. They counted up his money, applied the match, and Drew had just enough money to go to the store and bring his iPad home! Can you even imagine how proud that little boy must have been? At six years old, he was able to make a purchase that many adults can’t afford. And he did it through hard work and patience—and with some encouragement from parents who really get it.

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Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, and host of The Rachel Cruze Show. Rachel writes and speaks on personal finances, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches 18 million weekly listeners with her personal finance advice. She has appeared on Good Morning America and Fox News and has been featured in publications such as Time, Real Simple and Women’s Health magazines. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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