How to Save Up Money as a Kid for Your Goals

Saving money is a valuable skill that benefits individuals throughout their lives. This guide offers practical advice for children interested in building their savings. Learning to manage money early helps establish positive financial habits and empowers young people to achieve their goals.

Sources of Money for Kids

Children can acquire money through various age-appropriate methods. A common approach involves receiving an allowance, often tied to completing household chores. Parents might assign a dollar value to tasks like washing dishes, vacuuming, or folding laundry. Some families implement a system where children choose chores from a posted list, earning payment upon successful completion.

Children can also earn money by helping neighbors with various tasks. Popular options include babysitting, walking dogs, or pet-sitting. Washing cars or helping with yard work, such as raking leaves, also offer opportunities for earning.

Creative endeavors also present avenues for children to generate income. Selling unwanted toys, books, or clothes at a garage sale or through online platforms, with parental supervision, can turn clutter into cash. Crafting simple items to sell is another way to earn. Children can make and sell friendship bracelets, greeting cards, bath bombs, or slime. These pursuits help children understand concepts like pricing, cost, and profit.

Setting Your Saving Targets

Establishing a clear goal provides motivation for saving money. Children are often more motivated to save when they have a specific item or experience in mind, such as a toy, video game, or family outing. Helping a child identify what they desire makes the saving process tangible and exciting.

For larger goals, break them down into smaller, manageable steps or mini-goals. For instance, if a child wants to save for a bicycle, they can set smaller targets for specific parts or percentages of the total cost. This approach makes the overall goal seem less daunting and celebrates progress. Achieving these smaller milestones boosts motivation, encouraging continued saving.

Visual aids enhance a child’s motivation and track their progress. Creating a savings chart, like a temperature gauge or ladder, allows children to color in or mark off increments as their savings grow. A picture of the desired goal displayed prominently also serves as a constant reminder. Using a clear jar instead of an opaque piggy bank allows children to visually see their money accumulate, making the process more rewarding.

Where to Keep Your Savings

Safely storing saved money is important for children’s financial management. For small amounts, options include a piggy bank, a designated jar, or an envelope. A clear jar is useful as it allows children to visually observe their money growing, reinforcing the concept of saving.

As savings grow, a bank account designed for kids offers increased security and organization. These accounts, often called children’s or youth savings accounts, typically require a parent or guardian as a joint account holder. This arrangement allows the adult to oversee the account while the child learns banking. Many financial institutions offer such accounts with low or no fees and minimal or no minimum balance, making them accessible for young savers.

Opening a children’s bank account typically involves the parent or guardian providing identification, such as a driver’s license, and their Social Security number. The child’s Social Security number and identification, like a birth certificate, are also usually required. While some banks allow online account opening, others prefer an in-person visit, which can be a learning experience for the child. These accounts provide a secure place for money, protecting it from loss or theft.

A benefit of a bank account is the potential to earn interest on saved money. This introduces children to the idea that their money can grow over time. Banks pay interest for holding the money, a concept explained simply as money making more money by sitting in the account.

Tracking and Growing Your Savings

Monitoring savings progress helps maintain motivation and provides a clear picture of goal proximity. Simple tracking methods include using a notebook to record deposits and withdrawals, or creating a physical chart. Charts can be designed as temperature gauges or ladders, where progress is visually filled in. Some online apps or websites also offer tools for children to track their earnings and savings. Regularly reviewing these records reinforces the habit of saving and helps children see their efforts pay off.

A fundamental concept in growing savings is interest, which can be introduced simply. Interest is money earned from keeping money in a bank account. The bank pays a small percentage of the saved amount for using their services. This means that over time, money in a savings account can increase without additional deposits. Explaining that their money can “make more money” by being in the bank helps children understand the benefit of leaving savings untouched.

Another way money can grow is through parental matching programs. Parents can offer to add a certain amount to their child’s savings for every dollar the child saves. For example, a parent might match fifty cents or a dollar for every dollar saved. This incentive encourages consistent saving and demonstrates a tangible reward.