Skip to content

7 Ways Parents Can Encourage Kids to Save Money

Mother and daughter putting coin inside piggy bank.

Teaching your child about money is a responsibility of every parent. Kids who learn about saving early establish good financial habits and are set up for financial success later in life. Your child’s future is far more likely to be financially stable if they learn about financial responsibility when they’re young.

We love talking about saving money for kids because we know how important it is. As your children grow into young adults, they’ll have life goals and they’ll have an easy time meeting them financially if they have the right foundation. Here are seven ways that parents can encourage their kids to save money.

Why Is It Important for Kids to Learn About Money Management Early On?

If you want your kids to have good financial habits, then financial literacy must be a priority. It’s important to model smart financial management for your kids, but that’s not enough. According to the National Financial Educators Council, only 23% of kids reported that their parents talk to them regularly about money.

Financial wellness starts at home. Kids are observant and notice more than you might realize about how you manage your personal finances. Since that’s the case, you might consider talking to them about money to make sure they know about the importance of early saving and other important financial topics.

7 Ways Parents Can Make Saving Fun & Engaging for Kids

Kids can be eager to learn about saving and money, particularly when parents find ways to make doing so fun and engaging. If you’re wondering how to encourage kids to save money, here are seven ideas and saving strategies to help you.

#1: Open a Savings Account for Your Child

One of the easiest ways to save money is with a savings account. Many credit unions and banks have accounts designed with young savers in mind. These accounts can take the place of a piggy bank and help kids learn about concepts like dividends and interest.

Some kids’ savings accounts, including Future Leaders Savings Account from Leaders Credit Union, offer high dividend rates up to a specified balance. It’s a way to encourage and incentivize kids to save money. They’ll be able to watch their money grow and by doing so, get their first inkling of how compound interest can help them achieve their financial goals.

#2: Automate Savings from Their Allowance

One of the best saving strategies we know is to automate savings. Some parents prefer to split kids’ allowance evenly between spending, saving, and charitable donations. Others add investing to the mix. There are a variety of different options, but it’s essential to make saving a priority.

For example, you might give your child $1 or $2 per week for each year of their age. A five-year-old would get $5 to $10 per week, a 10-year-old would get $10 to $20 per week, and so on. Of that amount, one third would go automatically into their savings account. Automating savings illustrates that saving is important and instills the habit while kids are young.

#3: Use Technology to Encourage Savings

Today’s kids are all digital natives and that makes the use of savings apps and other financial tools a natural way to encourage them to set a savings goal (or several) and watch their money grow. 

There are tons of apps available. Some are focused only on savings. Some add budgeting, spending, and investing. For the youngest kids, savings is the most important thing. We’ll recommend the best (and most kid-friendly) apps later in this article.

#4: Have Your Kids Set Savings Goals

Savings goals can incentivize people of any age to make saving money a priority. When your kids get money, you can help them learn about financial goals and how saving can help them achieve the things they want to do in the future.

Savings goals may be for the short-term or long-term goals. An appropriate short-term goal for a young child would be saving up to buy a toy or go to a theme park. Long-term goals might include saving for a car or accumulating money for education expenses.

#5: Give Kids Ownership with Their Money

While we strongly encourage automating kids’ savings, we also think it’s a must to give them a sense of control over what they do with their money. Savings goals are one way to do that, but there are other options.

We mentioned earlier that some parents like to put a percentage of their child’s allowance toward charitable giving. You can encourage kids to do this by letting them pick the charity. While this isn’t technically saving money, it does show kids that money isn’t only for spending on themselves. When they choose their own goals and make their own donations, they’ll feel invested in what happens with their money.

#6: Let Kids Earn Their Own Money

A spending (and saving) allowance is only one way to encourage kids to save their money. Giving them the opportunity to earn money by helping you around the house and yard is a great way to give them a sense of ownership and encourage saving. 

Be sure to tailor tasks to match children's developmental stage and age. You can also use this as an opportunity to introduce the concept of negotiation by proposing a payment amount and inviting them to share their thoughts on its fairness. Another important thing is to encourage your kids to find a job when they are old enough so they can start to earn more of their own money. Building habits of working hard for what they want is an important life skill.

#7: Require Kids to Pay for Impulse Purchases

When a child wants something, they’re unlikely to think about the consequences of buying something on impulse. You can encourage them to save money and think about the value of their savings by requiring them to pay for impulse purchases. They’ll be learning about opportunity costs!

Your child may be less likely to spend impulsively if they understand that the money is coming out of their bank account. They still have the choice to spend it, but building in a lesson may mean that they’ll keep their eyes on the prize and rationalize their way out of buying that toy or game.


What Are the Best Tools or Apps to Teach Kids About Money?

Technology can do a lot to teach kids about saving and instill good money habits. Here are some of our favorite financial tools and apps for kids:


Greenlight is a family app that parents can use to teach their kids about an array of financial topics, including saving, spending, and investing. Kids can get a debit card and parents have the option to set reasonable spending limits and get notified any time their child uses the card.

Kids earn free rewards of up to 5% on their savings. Plans range from $4.99 per month for the basic plan to $14.98 a month for the Infinity plan, which includes extra features like location sharing and driving reports.


FamZoo is another family-oriented app that incentivizes savings, gives kids the opportunity to spend using a debit card, and includes extra features like parent-paid compound interest and loan tracking for when parents loan their kids money.

FamZoo isn’t designed to be used with a bank account. Instead, parents load up a prepaid debit card. You can attach payments to chores and tasks and FamZoo will track them and pay kids when tasks are completed. Prices are as low as $2.50 per month if you pay annually in advance.


Parents who want to make teaching their kids financial literacy a priority will appreciate Banzai, a financial education app that gamifies learning about money. They offer courses aimed at specific age groups, including Banzai Junior for kids in grades 3-7 and Banzai Teen for kids in grades 6-12.

Banzai is free. While it’s often used by teachers in the classroom, it can also be used by parents who want to engage with their kids about financial responsibility.

Acorns Early

Acorns Early is an Acorns product that’s designed especially for kids. It’s a UTMA/UGMA where parents can deposit money for their kids to be used in ways that directly benefit their child. That includes educational expenses.

The account costs $9 per month. When your child comes of age, you can transfer the funds to an Acorn Invest account. What sets Acorns Early apart from the other apps we’ve mentioned is that friends and relatives can give money to your child.

Freedom Path

If you'd like a free way for your child to learn about good financial habits, we have an online program at Leaders called Freedom Path. This is an online platform that includes video lessons over a variety of financial wellness topics, such as budgeting, smart spending, and saving. Your child can take the courses to learn how to be a better saver and be disciplined with their money.

Incentivize Your Kids to Save Money with Leaders Credit Union

Encouraging your kids to save money is one of the best things you can do to help them become financially literate and successful adults. The seven saving strategies we’ve outlined here can help you get your kids excited about saving.

Are you looking for a youth bank account that can help your child learn about money management and savings? Open a Future Leader Savings account for your child  or check out our free Beginner's Guide to Establishing Savings today!