How to Save Money as a 10-Year-Old

Learning to manage money is a valuable skill for a 10-year-old to achieve personal desires and financial responsibility. Saving money is a rewarding experience, offering a sense of accomplishment as funds grow towards a chosen goal. This process helps young individuals gain an early appreciation for the effort required to earn and save. Developing good money habits now provides a strong foundation for future financial well-being.

Ways a 10-Year-Old Can Earn Money

A common way for a 10-year-old to receive money is through a regular allowance, which can sometimes be linked to household responsibilities. Many experts suggest an allowance of $0.50 to $1.00 per week per year of age, meaning a 10-year-old might receive $5-$10 weekly. Some families offer $10-$20 weekly. This consistent income source helps children learn budgeting and the value of a dollar.

Beyond an allowance, various age-appropriate tasks and odd jobs can generate income. Simple household chores, such as organizing rooms or helping with laundry, can be compensated. Opportunities outside the home include pet sitting, dog walking, or assisting neighbors with yard work like raking leaves or watering plants. Washing cars for neighbors is another option.

Selling unused items can also be a source of funds. A 10-year-old can sell old toys, books, or clothes at a garage sale or with parental help through online platforms. Creative endeavors like running a lemonade stand or selling handmade crafts offer entrepreneurial experience and teach basic business principles. Money received as gifts for birthdays or holidays presents another opportunity to save.

Setting Savings Goals

Having a clear savings goal makes the process more engaging and purposeful. Specific goals provide motivation and help avoid impulsive spending. Goals can be categorized into short-term and long-term objectives.

Short-term goals are typically items saved for in less than two years, such as a new toy, a video game, or a specific book. Longer-term goals might involve saving for more significant purchases that take several years to achieve, like a new bicycle or a special experience. Visualizing these goals can be a powerful motivator. A child might draw a picture of their desired item, create a wish list, or place a photo of the goal near their savings spot. Simple charts can also be used to track progress, allowing the child to see how close they are to reaching their objective.

Tracking and Storing Your Money

Managing physical cash can begin with simple home storage methods. A traditional piggy bank or a clear jar allows a child to see their money accumulate, providing a tangible representation of their savings. Using separate jars for different saving goals can also be effective. To keep track of money earned and spent, a simple notebook or ledger can be used. This practice helps reinforce basic math skills and provides a record of financial activity.

As a child’s savings grow, a kids’ savings account at a bank becomes a viable option. Minor children cannot open an account independently; a parent or legal guardian must open either a custodial account or a joint account on their behalf. A custodial account means the adult controls the money until the child reaches a certain age, typically 18 or 21, depending on the state. A joint account allows both the parent and child to access the funds, with the parent often supervising transactions.

To open such an account, the parent needs to provide the child’s name, birthdate, and Social Security number, along with their own identification and an initial deposit. Many banks offer kids’ savings accounts with low or no monthly fees and minimal balance requirements. These accounts can offer a small amount of interest, allowing the money to grow over time and introducing the concept of earning from savings. While the parent manages the account, the child can participate by giving money to the parent for deposit and reviewing statements or online access to monitor their balance.

Making Smart Spending Decisions

Understanding the difference between needs and wants is foundational for informed spending choices. Needs are essential items like food, shelter, and clothing, while wants are desired but not necessary, like toys or games. Learning to distinguish between these helps a child prioritize their spending.

Before making a purchase, it is helpful to pause and consider if the item aligns with savings goals or if it is an impulsive desire. This encourages thoughtful decision-making rather than immediate gratification. Delayed gratification—waiting for a larger, more satisfying reward instead of an immediate, smaller one—is a valuable skill in financial planning. For instance, waiting to save for a more expensive item can be more rewarding than buying several small, less satisfying things.

A practical strategy involves allocating money into different categories. A child might divide their earnings into portions for saving, spending, and an optional portion for giving to charity. This approach helps in budgeting and ensures that funds are set aside for both immediate enjoyment and future aspirations.