Teaching Children to Save: The Spend, Save, Give Method of Budgeting

Not sure how to start teaching your kids about finances? One of the best ways to make complicated topics easy is by providing real-life examples. If kids try these concepts out for themselves, they can carry that knowledge for the rest of their lives. That’s why we recommend trying the spend, save, give budgeting method.

What is the spend, save, give budgeting method?

The spend, save, give method teaches your children about different parts of their budget and how to plan for their expenses. As the name implies, it involves creating three budget categories:

Spending for regular expenses like treats, fun activities, and toys.

Saving for bigger items like a new bike or video game system.

Giving to a community cause they care about, like an animal shelter, class fundraisers, or food banks.

Getting started

It can be hard for your child to understand that they can’t spend their money right away. To start, sit down with your child at the beginning of the month and explain the concept of budgeting. Negotiate a breakdown of how much of their allowance will go into each category. Here are some tips to help:

• Make sure they understand they still have funds to spend as they’d like within the spending category.
• Find a savings goal that your child can get excited about, and explain how long they will need to save to reach that goal.
• Work with your child to find a charity or cause that they love.
  • Lil’ Buckaroo Tip: If you have time, volunteering with your child at their charity of choice can be a great way to show how important their donation is.

Following through

One of the most important parts of teaching finances is consistency. If you can make sure your child is saving as you agreed, they will begin to build habits that will last a lifetime. Here are a few tips to help them stick with it:

• Open an account that rewards your child for keeping up with their savings, like our Lil’ Buckaroo Savings Account.
• Keep track of their savings goals and how long they have left to save.
• Show them how much their donations help by taking them to volunteer at or attend events for their favorite charity.

Setting a budget and following through can be difficult, even for adults. Don’t be discouraged if you run into problems, have to start over, or your child doesn’t take to the method right away. You are working to make them financially literate for life, and that is worth the effort!

See how you can start your kids on the path to savings here.