Ready. Set. Save!

How to Help Your Kids Set and Achieve Smart Savings Goals
By Rachel Galvez

Learning to save money is one of the most important financial lessons kids can learn. And while it’s never too late to build good saving habits, starting young makes a difference. Researchers at Cambridge University discovered the money habits that guide financial decisions in adulthood begin forming by age seven.

Often, the first thing children learn about money is how to spend it. From a young age, they see parents exchange money for groceries, gas, and treats. That’s why experts say it’s essential to start talking to your kids about money around age 3 – and to keep the conversation going until they’re young adults. Introducing concepts such as how money is earned, budgeted, and saved helps kids make sound financial decisions.

Money doesn’t grow on trees

Take the mystery out of money by talking about how you earn it for the work you do and demonstrate how, once it’s earned, money is used to buy things the family needs. As children reach age 5 or 6, consider paying them an allowance for the completion of chores. The allowance amount can increase as the child gets older and takes on more responsibility.

Earning money comes with choices

Be open about family money decisions. Talk about budgeting and the trade-offs you make between needs, wants, and unexpected expenses. These types of discussions help kids understand money isn’t unlimited and how much things cost. As soon as kids start earning an allowance, help them map out a plan for how they’re going to use it.
Experts recommend introducing a spend, save, share approach. By dividing each week’s allowance into three buckets, kids learn to automatically save a portion of their earnings while still being able to spend some. Plus, setting some money aside to share with others gives kids the chance to see the impact their money can have.

For younger children, splitting allowance money evenly across the spend, save, share categories works well. As kids get older and take on more of their own spending, experts recommend allocating at least half of allowance amounts or paychecks from a summer job to the save and share categories. Opening a youth savings account is a good way to reinforce the importance of savings – and learn about the power of earning interest.
Smart savings goals at every age

Saving is always easier when there’s a goal in mind.

The first savings goals are typically a special toy or game. The key is to make sure the goal is attainable within a few months of saving so kids experience success. When helping young children set savings goals, you may want to match their savings to help them reach the goal more quickly. Older kids should set longer-term goals, including saving for college or a car. For larger savings goals, consider setting up dedicated savings accounts to help track progress.

If your kids need extra motivation to get started, try a savings challenge to engage their competitive spirit. Check your financial institution’s programs or consider Arizona Federal’s Money Talks Savings Challenge, which helps inspire smart saving habits. When kids and teens make a deposit of $5 or more, they’re automatically entered in a giveaway drawing that could add $100, $250, or $500 from Arizona Federal to their savings balance! (One entry per month, April through June, 2022.)

Watch savings add up with spend, save, and share money jars

Saving money can feel a bit abstract for kids, especially when they rarely see parents using cash. To make the lessons more tangible, create spend, save, and share jars that kids can use to divide their allowance each week. Get out the stickers, glitter, and paint and let kids get creative decorating and labeling the jars – or buckets, boxes, or envelopes. Then, watch the savings add up.


Rachel Galvez is the Marketing Partnerships Manager at Arizona Federal Credit Union. A mom of two, Rachel is committed to empowering families with the information they need to make smart financial decisions now and set their children on the path to financial success in the future.