Early trick to teaching your kids to save

by Twirltheworld

I’ve been debating sharing with this forum our experience in teaching kids how to save. ultimately, I think there are a lot of us here with kids (we’re just too busy to post much), and I certainly love reading posts about people with kids and how they manage their FIRE methods. My hope in sharing this is that it’ll be helpful to others and maybe even improve on the technique (and share if you do!).

My husband and I are both avid stalkers of this forum and have been saving for years. Neither of us got any formal teaching in how to save – we just observed our parents making frugal choices and not overly-stressing over money and that more-or-less got the message through to us by mid-adulthood. Now we have 4 kids and we’ve been trying to figure out how to make the desire to save ingrained in a more proactive manner. I’ve read “The Opposite of Spoiled” and while we love the idea, our kids are ultimately still too young (our kids are 5 and 2.5).

Here’s where we stumbled on a surprisingly successful idea. We had been using “tokens” – ie poker chips – to reward good behavior. Start the day with 3 tokens and earn a token every time you do a big helper job (like taking out the recycle) or lose a token if you’re unkind or disobedient. Tokens are not given out for their chores – each kiddo has chores they have to do every day and tokens are not awarded for those jobs done; we didn’t want to get into a “pay me for doing any work around the house” scenario. We frequently remind them that the chore list grows as they get older and they’ve seen it happen, but because we by-large do chores as a family, there has been zero push back when we transfer jobs from token-earning to regular-chores. At the end of the day, the tokens are cashed in for sugar of various forms: right now a jelly bean is 1 token, a buttermint is 2 tokens, and an oreo is 5 tokens. The kids typically end up with a range between 3-7 tokens; on really great days they’ll break 10.

This worked pretty well for behavior adjustment, and then one of our 5 year olds had a really good day (lots of sugar at the end) and decided she didn’t want to eat it all. She got a bowl with her name on it, and she saved the extra. We told her she could eat it the following day whenever she wanted – that it was hers. Our other 5 year old wanted a bowl with her name on it too, but (we were becoming wise) we told her she could only have a bowl if she saved. Now we had two kids saving candy day over day.

They started telling the two 2.5 year olds how awesome it is to be able to eat candy the next day whenever you want. The littles tried it once, but ultimately instant gratification would win out. Then I decided to introduce interest. Our new rule is: if you save at least one jelly bean or half an oreo through breakfast the next day, you get another jelly bean in your bowl. This was life-changing for the littles – they now regularly save over and above what they have to and sometimes ask for their bowls just to count their candies. EDIT: I’ve had a few ask so clarification: interest is only 1 jelly bean total, no compounding 🙂

At one point my 5 year olds took their candy bowls downstairs in the evening to play video games with me and ate all of their candy at once. I had warned them that it’s easy to eat more than you expect while watching TV but ultimately we let them learn simple lessons the active way. And it was so exciting the next day to hear them comment to each other things like, “We shouldn’t have taken our candy downstairs.” “Yea, my bowl is empty and I’m sad.”

The Opposite of Spoiled” is a great book and we’ll definitely be applying it as the kids get older but my initial mistake was using cash – a currency kids just don’t care about. By introducing small amounts of sugar as a currency instead, I feel like we’re early on teaching them about the joys of surplus and the avoidance of instant gratification. What’s more, they now have the terminology already in place – we talk about saving candy for later, earning interest on it. The hope is that they will have an active understanding of the power of saving from toddlerhood on.

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