Your Kid’s Not Saving Money. But Do You Know Why?

So, you're teaching kids to save money…and it's just not happening. But do you know why, exactly? Because figuring that out can show you the specific thing(s) to work on to move them forward.

Sooooo, your kid’s not saving money. In fact, they’re spending it faster than bubble gum companies can restock the checkout shelf (or at least it feels like that).

And you’re starting to wonder if this handing-over-money-to-your-child thing is just another way your hard-earned money has found a reason to exit your OWN savings.

I mean, how the heck are you supposed to teach kids money management or how to teach your child the value of money when they see it as a free-for-all?

Hi, I’m Amanda L. Grossman from where I’m teaching kids aged 8-13 how to save money through educational adventures like the Mt. Everest Money Simulation.

Today I’d like to talk to you about how to dig deeper into the age-old problem of a kid who spends their money.

ALL of their money.

I’m going to give you a rundown of 9 different reasons for why your kid might not be saving their money, so that you can do some digging and get to the bottom of the behavior.

After all, every kid is different, right? Awareness first, then you can redirect the ship!

Reason #1: They Don’t Have a Savings Goal.

The best, smallest action step you can take to get your children to care about saving money (or money in general) is by asking them to set a savings goal.

You can talk them through the entire goal setting for kids process here, but in a nutshell:

  • Ask them what they would like to be/do/have outside of what you guys provide for them.
  • Walk them through prioritizing all their funny, lovely ideas down to just the ONE that makes sense for right now (hint: that’s usually the quickest win, as kids are not at the stage where they can happily live out pleasure sacrifices for long).
  • Ask them if they know how they can be/do/have that.
  • Help them research and price the cost of their savings goal.
  • Help them come up with a savings plan for how to actually get there.

Bonus: have them write their savings goal down. According to this study, 68% of kids with a written down savings goal track their spending. And tracking your spending? That’s just a hop + skip away from saving enough money to get what they want.

Reason #2: They Don’t Believe It’ll Ever Happen.

Do you know how hard it is to believe that something you’ve never seen successfully occur, will actually work out? If your child has never seen the other end of a savings goal, then they may not believe – especially come week 3 of setting aside money they could be using to buy more Pokémon cards – that it will ever actually happen.

This is why it’s so important, at this stage in the game, to help them prioritize the savings goal that is the quickest win. Today, choose a savings goal that will take them 2 weeks or two-allowance/chore commission cycles to accomplish.

And next year? They’ll be more able to tackle one that’s a few months out.

Reason #3: There Aren’t Clear Money Expectations Lined Up.

If your child thinks you might end up buying them what they want to be/do/have, then there’s no real reason for them to start saving money towards it, right?

Once you learn what your child would like, you need to set up clear expectations for them with who is going to pay for it. Are you going to pay for part of it? Or is the whole responsibility theirs? Can they ask for it at a holiday/birthday occasion?

In the future, you can help clarify things by categorizing what is their responsibility versus what is yours, such as your teenager taking over all responsibility to pay for their weekend hangout with friends, or your 8-year old taking over responsibility to pay for any candy they happen to put in the cart at the grocery store.

Reason #4: They Haven’t Witnessed Good Saving Behavior.

Don’t beat yourself up for this one – I sure as heck am not. But it IS a reason for why your child may not be saving their own money. Have they witnessed good savings behavior from you or your spouse? Do they know what saving money is?

This would be a great time to open up the savings conversation and show your kids what you guys are saving for, the sacrifices you’ve made, and how great it is when you actually get what you want. Teaching children to save money doesn't have to be hard when you can model it yourself.

Reason #5: They Don’t Earn Enough Money Beyond Paying for Responsibilities.

Have you laid out money responsibilities for your child to pay for…that very closely exactly aligns with how much money you’re giving them? If that’s the case, then they certainly won’t be able to stockpile any (though you could challenge them to become creative in how they buy what they need, such as use a coupon, or buy in bulk and dole it out in the same amount they would have used anyway, etc.).

What would happen if you increased the amount of money that you gave them, or took away one money responsibility that they need to pay with it? Who knows – but teaching your child to save money might be on the other side of that.

Reason #6: They Have a Weak Instant Gratification Muscle.

Hint: Most kids have this one. Especially if you're teaching preschoolers about money. 

It turns out many of us aren’t born with the strong ability to look instant gratification in the face and turn a cheek.

But you know what? You can actually stretch and grow your kiddo’s instant gratification muscle. Check out my post all about how your child can learn to grow their instant gratification muscle.

Reason #7: They Have No Incentive to Do So.

If we’re going to be honest with ourselves, then most of us can say we need an incentive to actually do something.

Does your child have any sort of incentive to save their money? Incentives could be:

  • Matching contribution from you guys.
  • Interest earned in their savings account.
  • Having had success meeting a savings goal before and getting to buy that sweet thing they wanted to do/be/have.

Hint: this is why the fed raises/lowers interest rates. They want to bait us all to either spend more money/take out more loans, or to stop spending so much money/save more of it.

Reason #8: They Don’t Have a Physical Space to Save their Money.

Does your child have a physical separation between money they’re going to save, and money they’re going to spend?

This could look like:

  • A mason jar for savings.
  • A compartmentalized piggy bank.
  • A wallet with one slot to spend, the other to not spend today (though this is very short-term if it’s as accessible as reaching into a different slot).
  • A savings account.

Reason #9: They Don’t Understand the Value of the Money They’ve been Given or Earned.

Your kiddo might not actually get the awesomeness of the money they’re given or that they've earned. Because they might not understand that a little bit of money, set aside for a period of time, adds up to a lot of money.

Like today, they might look at their allowance as candy money. But you need them to see that, given time to accumulate from week to week, it’s actually skateboard money, or video game money, or rock-climbing camp money.

Pssst: Check out this article on how to get them to understand the value of their money

Oh, the power they have in their hands! If they can only realize that it just takes time and some restraint.

There you go. Now you want to assess where your own child is getting hung up on – or the MULTIPLE places they’re getting hung up (more likely) – so that you can work on getting rid of those specific road blocks to saving money.'ve tried everything, and your money convos with your kiddo has turned into a big nag-fest. Well, I'm here to help! There are 9 reasons why your kiddo might not be saving money, and I've given you steps to take to help each one alone. #teachkidsmoneymanagement #financialliteracy #kidsandmoney |

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