Family are sitting at a desk with a paper receipt and calculating expenses, managing budget.

Teaching Kids to Save Money


The ABCs of Finance: Teaching Kids How to Save Money

In today’s fast-paced world, financial literacy is a crucial life skill. As parents, it’s our responsibility to equip our children with the knowledge and habits they need to navigate their financial futures confidently. This blog provides practical tips and strategies to teach your kids about money management and saving, helping them prioritize and save.

The Importance of Early Financial Education

Understanding the value of money and the concept of saving is a vital life skill. Starting this education early sets your child on a path to financial success.

Children as young as four to five years old can begin grasping these concepts, retaining information, and making choices. By the time they reach grades three through six, they can start managing small amounts of money to turn concept into reality.

Practical Ways to Introduce Money Management

  1. Chore-Based Allowance: Assign monetary value to chores. This method introduces them to the concept of earning and teaches them the value of hard work.
  2. Piggy Bank System: Encourage your child to save their earnings in a piggy bank. This visual representation of saving is a powerful motivator.
  3. Point System: Instead of money, start with a point system where each chore equals a certain number of points. Over time, these points translate into cash or coins, teaching them the value of patience and perseverance.

Spending, Saving, Sharing

As children grow older and earn money through allowances or part-time jobs, showing them how to allocate their earnings wisely and differentiate between wants and needs is essential. Encourage them to have several savings buckets for different purposes, such as spending, emergency, and giving funds. This strategy helps them understand the importance of planning and prioritizing spending.

  • Spending: Beginning with spending, emphasize the importance of paying yourself first. Additionally, helping them set a budget or goal makes the process more tangible and exciting.
  • Saving: Learning the importance of saving for a new toy can be engaging for children using a piggy bank while building an emergency fund for unexpected expenses prepares teenagers for financial uncertainties like car or electronic repairs.
  • Sharing: In addition to saving and spending, teaching children about the importance of sharing, or giving, is essential. Setting money aside for charitable causes helps children understand the value of empathy and social responsibility. It’s not just about the amount they give, but the act of giving itself that matters. This practice instills a sense of generosity and compassion in children, showing them that money is also used to help others and to positively impact the world.

Financial Literacy Resources

Traditions Bank offers resources such as children’s books that teach about currency. The first time you come into the bank with your child, you may ask for a copy of Carnival Thrills and Dollar Bills. The fully illustrated book is perfect for teaching children in first through third grades about U.S. currency.

We also offer Youth Savings Accounts that parents or guardians can open for their children as soon as they’re born. The two account options include:

  • PUTMA: The PUTMA (Pennsylvania Uniform Transfers to Minors Act) is a unique financial tool that lets adults accumulate savings for children under 21. Acting as the custodian, the parent makes deposits into the account, which are later gifted to the child. The child, on the other hand, does not have transactional access to the account. This lets the custodian grow the account over time. Once the child reaches 21, the custodian transfers the account’s funds.
  • Young Traditions Savings Account: The Young Traditions Savings Account is designed for children between 6 and 12 years old. The account custodians, who are Traditions Bank customers, are co-owners of the account. This setup lets the child actively participate in their financial journey by depositing cash and coins, tracking their balance, and observing their savings grow over time. As the custodian, you can choose to transfer funds from other Traditions Bank accounts into the youth savings account. As the child matures and reaches the age bracket of 13-22, they can have the account solely in their name.

These resources are a great way to introduce your child to the world of finance. As your child gets older, work with them to plan for, set, and meet their savings goals. A savings account helps kids focus on their needs and wants and helps them learn how to prioritize savings for their expenses while creating as little debt as possible.


Teaching kids how to save money is a valuable lesson that will serve them well throughout their lives. By starting early, setting a good example, and using practical strategies, we help our children develop strong financial habits. Remember, the goal isn’t just to teach them about money—it’s to prepare them for a future where they control their financial destiny.

Looking for teaching resources and lesson plans around youth savings? Here are some great free resources from the Financial Literacy & Education Commission and Practical Money Skills.

Interested in learning more about our youth savings accounts or financial literacy from a young age? Send us a message and a member of our Customer Care Team will be in touch.

Clicking on social media icons will redirect you to external pages on a server not controlled by Traditions Bank.

Online Banking

New to Online Banking? Enroll Now

You are about to leave the Traditions Bank website

The website you have selected is an external website located on another server. Traditions Bank has no responsibility for any external websites. It neither endorses the information, content, presentation, or accuracy, nor makes any warranty, express or implied, regarding an external site.