Lifelong savings habits can begin with piggy banks

Getting your children to understand the importance of saving money isn’t easy. Developmentally, children don’t even understand the concept of the future until around age 6 or 7, so getting them to understand about saving before that age is particularly difficult. However, even the most difficult job is possible with a little creativity! Here are a few tips on how to get your little ones to understand that their piggy banks serve a higher purpose than just looking cute.

1. Piggy banks. Speaking of cute piggy banks, this is a classic method. And piggy banks aren’t limited to being piggy-shaped – they come in shapes, sizes and characters sure to appeal to the sandbox set – I even had one that was shaped like a giant Tootsie Roll! Encouraging your children to drop a coin or two in every once in a while can really add up. Do-it-yourselfers can even help their children make their own piggy bank, which will surely make them feel invested.

2. Translate savings into a goal. Erin Anderson, of Atlas Peak Advisors, in Cranston, says equating savings with something children can buy can help them keep their eyes on the prize, so to speak. Translating those daily or weekly contributions into a video game or a tea set can help children understand why immediately spending their money on candy or other junk might not be a good idea.

3. Matching contributions. Anderson also proposes that you adopt this fundraising strategy, popular with humanitarian nonprofits, by pledging to match your child’s contributions to a savings account. This method gives the child an added incentive to save since they’ll see the dollars add up quickly.  

4. Non-monetary rewards. The tried-and-true Pavlovian method can be applied to humans, too! Every time children reach a certain milestone in their savings, give them a reward or small gift that isn’t money. John McMahon, of Mechanics Co-op Bank in Fall River, Massachusetts, suggests that every $10 earns a pizza night out - and this one includes a bonus for you, too: pizza!

5. Needs vs. wants. McMahon also suggests that establishing the difference between something your children need versus something they want can be an effective way to help your children save. You can do this by reminding them that the things they want cost money and that saving is a good way to get them.

6. Hiding savings. A bit unconventional, but this method did wonders for me. When I was in my early teens, I started hiding small amounts of money in objects in my bedroom and then forgot about them. When I came home during college breaks and would clean old things out of my room, well, I had a few nice surprises waiting for me.

ARIEL BROTHMAN is a freelance writer who lives in Wrentham, Massachusetts.