How To Train Your Child To Save And Spend Wisely

Training your child to save and spend wisely isn't always easy, but it's something good parents need to do. Read my tips on training your kids to save.

How to train your child to save and spend wisely:

It’s our responsibility to get our children off to the best start possible when it comes to their management of money, but it’s not always easy. How can you teach a child who is reluctant to learn about money how to save and spend wisely, without making it feel like a lecture?


Should you use cash or cards to teach your child about money?

Whilst many people advocate staying away from cards entirely, I don’t agree. Still, I recommend using cash for children’s pocket money.



Cash feels more real to a child because it’s tangible.

The older we get, the more we can understand money as an abstract concept. Children aren’t there yet.


Receiving change makes a transaction feel more “real”, and keeps them involved.


Spending real money is a more painful experience than spending with a card – experiencing the “loss” of the cash in exchange for what is bought will help children to manage their spending.

Is online shopping better than real-world shopping for training a child?


I don’t think it is.

Shopping in person as opposed to online increases the sense of reward – channel this to your advantage by giving a limited budget and scheduling shopping trips.

When a child makes their own choices about spending and saving, they learn more.

For my son, he was not interested in saving money until he turned 12.

The penny dropped when he became interested in buying his own clothes. We had been planning for him to use one of our prepaid Pockit cards on our shopping trip, but decided to let him hang on to his cash instead.

He got the sense of independence from making his own choices and purchases, but he quickly realised that his money was finite.


Amazingly, he started to choose to save!

How soon to give pocket money?

Many will disagree, but I’m not a fan of giving pocket money too early.

Kids have to learn to deal with the consequences of making bad financial decisions, but they’re guaranteed to make lots of them before the age of ten, and I’m not sure how much they learn from them at that stage!


I prefer to get little kids involved in learning about money by letting them pay for items in the shops.


Still, every child is different, and yours might be a financial prodigy… you just have to know your own child!


Help your child to understand income and expenses

I also started explaining to my son how much I earn and how much our major bills are. It helps him to learn how much he can earn, and how much adults need to earn.

Once children figure out their own earning capacity, they figure out how much they can spend.

Once children figure out their own earning capacity, they figure out how much they can spend. Click To Tweet


The one thing that I believe must be constant is that your child’s income must be finite.


Why should your child’s allowance be capped?

Children must know that money won’t just miraculously appear from elsewhere once they’ve spent all of their own. Does money miraculously appear for you if you decide to blow your entire paycheque in a weekend?

If your children do chores for cash, or if they have set pocket money times in the week, they have to know what the routine is, and that they can expect a fixed amount and no more.

It’s fair on both parent and child, and helps children to transition into life as an adult.


Over to you…

Do you agree, or disagree?

Do your children receive pocket money or earn money in exchange for chores? Let me know what you think in the comments below!


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