Top 3 things you could do with your kid right now

1. Get the “Save” piggy bank for your kid

It is important to teach your kid to save as early as possible. When you start giving allowance to your kid, it is the right time to start teaching saving habits. If you want your kid to be financially free in the future, he has to learn to save. Otherwise, no matter how much money he earns, if he spends all of it, he will not be free to decide what to do. E.g. he might not be able to quit job or take a one-year sabbatical if he needs to pay all the bills and has no money saved.

The easiest way to teach saving is to get the “Save” piggy bank for your kid. Tell your kid that 30% of income he receives should be put in the “Save” piggy bank. Explain to your kid that the more money he puts in the piggy bank, the quicker he will save for the desired thing.

2. Create the saving plan together with your kid

If your kid knows what she really wants, help her understand how long she needs to save. The smaller the kid, the shorter the saving period should be.

The simple saving plan could look like that:

• Write down the price of the desired thing
• Write down the amount of money your kid could save every week (e.g. 30% of the allowance she gets)
• Calculate the number of weeks needed to save the desired amount
• Draw a box for each week
• Place the picture of the desired thing next to the amount needed
• Let your kid cross out the box every time she puts the planned money in the piggy bank

Example of the plan, when the kid wants to save 20 EUR and receives 10 EUR every week as allowance.

Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7	Amount needed
3	3	3	3	3	3	2	20 (+ picture)

Once your kid saves the desired amount, celebrate that with her! Go to the shop, let her buy the desired thing and buy her ice-cream on the top. It is very important to teach your kid that saving is fun.

3. Encourage saving by doubling the saved amount

If your kid aims to buy a bike or a new telephone, it might take more time for him to save for it. Half a year could seem like ages for a 7-year-old. To keep up the motivation of your kid, you could consider adding the same amount to the saved amount. Communicate this clearly to your kid beforehand!

E.g. if you kid wants to save 200 EUR for a bike, you could agree that once he saves 100 EUR, you would add another 100 EUR. It is very important not to give more money than initially agreed! Otherwise, you will spoil the whole lesson.

Do you want to test how good you are in teaching other areas of financial freedom? Take the Financial IQ Test for Parents now!