How to teach children to save money

May 9, 2011

Susan Beacham, founder of 'Money Savvy Generation', combined her knowledge as a former private banking and investment manager and her experience teaching first graders, to create a system for teaching young children about money. Beacham says that parents need to recognize that when their children ask about allowances, receive birthday money, or see something in the store that they want; it is a prime opportunity for a teaching moment. "It is very important to teach children while they still look up to mom and dad, and think of us as experts", said Beacham, who knows from her own experience that if your children are not exposed to money decisions while at a young age they could have a lot of problems when they are teenagers. "Children should know what a want verses a need is, and the basics of investing money".

Susan Beacham's Top Tips to Teaching Children How to Save Money:

1. Teach Money Choice.
There are four choices for money: Save, Spend, Donate and Invest. Create or buy a bank that has all four choices visible to remind your child each time they have money available to deposit to stop and think about their choices. This will teach them that there is more to do with money than just spend.

2. Teach your child to set goals for each money choice.
Saving without a goal is like a football game without a touchdown. No fun at all. And, if it's not fun, kids will not play. So, when working with money choices, make sure your child draws a picture of what they are working towards so they remember their goal and stay motivated.

3. Remind them to save and pay themselves first.
Teach your child to "pay themselves first" by asking them to make a deposit in their savings account whenever they receive any money. Assure them that not all of the money they receive as a gift needs to be squirreled away in savings, just some of the money. Paying themselves first as a child will translate to a working adult that has a certain percentage of their paycheck swept into an investment vehicle before they even get paid.

4. Start allowance and pay only in cold hard cash to teach them to live beneath their means.
Set up an allowance that covers some expenses you cover for your child today. Let them manage that money and learn what it feels like to only have so much cash and when it's gone, it's gone. Allowance is the first step towards leaning how to budget.

5. Model the money behavior you want to see in your child.
Children may not listen to what we say, but they sure do watch us and mimic our behaviors. Instinctively, children understand that our behavior is more genuine than our words. Knowing this, only model what you want your children to absorb. Pay bills on time, use cash whenever you can, credit rarely, and take your kids with you to make savings deposits.

    Products shown are available at
  • Money Savvy Piggy Bank, $16.99
  • The Money Savvy Kids Club book series $12.95 each or $41.44 for four volumes
  • The Cash Cashe for teens $21.99
  • Savings Spree app available for iTouch, iPhone, iPad $2.99

Learn more about Susan Beacham on her blog at

About Susan Beacham (RELEASE)

Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

The company develops innovative products that help parents and educators teach basic personal finance skills to school-age children. In a world of increasing financial complexity, Susan's mission is to empower children and young adults to take control over their financial lives and financial futures.

A sought-after speaker for financial institutions, state regulatory agencies, trade associations, leadership conferences and schools, she is the creator of the Money Savvy Pig piggy bank-- the centerpiece of the Money Savvy Kids Basic Personal Finance Curriculum. This pioneering system uses age-appropriate instructional materials to teach kids about the value of money. Currently, this program is taught in school districts across the U.S. In order to address the 'tween and teenage years, Susan also developed the award-winning Cash Cache Beginning Personal Finance Organizer, which has its own age-specific curriculum, Money Savvy U.

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