Teaching Your Kids Discipline Through A Savings Account

One of the major pillars of developing teenage independence is to have financial independence. In most cases, children will likely never become financially independent while living at home, since there is no real pressing need. However, that will not always be the case.

So, unless you want your children moving back in with you after college because they can’t manage their finances well enough to support themselves, it is critical that they learn discipline when it comes to their money—and it can all start with learning to save.

Learning To Save An Allowance

For most children, saving money can’t really begin until they have some sort of steady income. Otherwise, it can be difficult to persuade them that they should save whatever money they may receive on their birthdays and Christmas. Since I personally don’t believe in paying for regular house chores, my wife and I have opted to give our children an allowance starting when they are five years old.

I’m not saying spoil your children with an unrealistic allowance, as it is far more likely to develop a sense of narcissism in your teen. Instead, you can try something similar to what our family does, which is the amount they receive is a dollar for how many years old they are. So, my seventeen-year-old daughter receives $17 a week while my ten-year-old son receives $10. As the system is based on their ages, it helps my children feel like it is fairer that they don’t receive the same amount of money.

With the steady “income stream” of a weekly allowance established, it can be far easier to help children learn to save.

Helping Children Set Savings Goals

Even for myself, having a goal to save toward makes it far easier to save my money. For us adults, these goals may look like saving for retirement or for a desired home upgrade. But children often have different goals they consider important.

So, no matter if you wish you had started saving for retirement as a teenager, it is not very likely that saving for retirement in 50-60 years will really appeal to your child. And without your kid’s buy-in, the goal will likely be a failure.

Instead of pushing your money-saving goals onto your children, help them set their own savings goals. Some ideas you may want to offer to kickstart their thinking are:

  • Saving up for a high-end toy or game
  • Putting away money for their first car
  • Set aside money to spend when out with friends
  • Saving for a trip or experience

As you can see, some of these money saving goals can span a shorter time period. But that’s okay. In fact, it is a fairly realistic look at how most adults spend their money. The important thing is that you don’t just step in and give them the money to reach their savings goals.

Allowing Self-Directed Savings Provide Discipline

For example, my oldest daughter liked to buy snacks at school with her allowance, then mall crawl on the weekends. She managed to hold onto enough of her allowance until her weekend mall time, until one week, she was completely out of money to spend.

Naturally, in her mind, I would provide more, but to her surprise, I told her no. Rather than have her learn later in life when it was a bill she couldn’t pay, my daughter went with her friends to the mall but felt the sting of being left out of buying a new accessory and food court fare. That, far more than anything I could have said or lectured, taught her the importance of saving her money.

If you want to help your children save more proactively for the long-term, there are several great kids’ savings account options. All of my children have a savings account with their own long-term savings goals that they determined.

Much of what we teach our children involves practicing lifelong self-care, from learning self-discipline to saving for the future. As you go about teaching your children to save their money, I recommend you keep in mind that learning to be independent and self-sufficient is a lifelong process. It may be frustrating for you and your children at times to practice these techniques of self-care, but it can also be ultimately rewarding.

Author of this article, Tyler Jacobson, enjoys going to the mountains near his home in Draper, Utah to connect with his wife and children through camping, hiking, and quality time together. When he isn’t rebooting in the outdoors, he shares his fatherly experiences with the world through writing and creative work. Tyler shares the ups and downs of family life and the solutions he’s found through lengthy research and involvement in the industry and his own experiences to help parents everywhere. Follow Tyler on: Twitter