7 Ways to Teach Your Kids the Importance of Saving ... and Giving

7 Ways to Teach Your Kids the Importance of Giving As the season of giving brushes elbows with the cabal of commercialism, we're presented with -- to borrow from the classic education vernacular -- an ideal "teachable moment."

Here are seven ways to show material boys and girls that saving -- and giving -- can be just as rewarding as getting.

1. Hand over the spending power. Tired of playing shopping cart bad cop? Turn the yes/no verdict over to Junior. Give your children control over their weekly "entertainment allowance" and see what happens. Children who are free to spend their money on whatever they want (provided it doesn't require gunpowder, gasoline, or a parental signature on a safety waiver) tend to be more thoughtful and less impulsive.

2. Make dollar decisions tangible. If it's hard for adults to visualize mounting debt or increased savings, imagine how abstract these concepts are to the little one. Visual cues can help. Illustrate important allocation lessons of short-term and long-term savings and charity with separate piggy banks for each, or even with a running tally on a whiteboard.

3. Pull back the curtain on retail marketing tricks. No one likes being told what to do, especially kids. Show them that advertisers are bossier than Mom and Dad are with a set of interactive lessons on common marketing mind tricks, available at pbskids.org/dontbuyit.

4. Reward savings behavior.
Positive financial reinforcement is a powerful tool. Encourage responsible cash conduct by making it worthwhile every time your child decides to save instead of spend. Set up a kiddie version of a 401(k) and offer to match money that they sock away for themselves and others (e.g., $0.50 for every dollar they save for themselves or a dollar-for-dollar match for money they raise for a good cause).

5. Let them pick a charity. Giving is just as important as getting -- and that good feeling can last a lot longer than the giddiness over a new toy. Involve your children in charitable acts. Get online together and find a cause they can relate to. (Try charitynavigator.org, worldvision.org and givewell.org.) Or find a local charity and take your kids there to see firsthand how their bequests will help. Have them deliver the donations (cash, toys, clothes, etc.) themselves.

6. Get them excited about stocks, not stuff. The stock market (and the passage of time) can also reward the little ones in a big way. Engaging kids in investing pursuits is easy: Just explain that when they buy a share of stock, they become part owners of the company, not just a customer. (A seat on the board, however, may have to wait until after they're old enough to drive.) Show them how they are surrounded by investment ideas, starting with breakfast (Kellogg (K)) to lunch and snacks (Kraft (KFT) and Coca-Cola (KO)), to entertainment (Disney (DIS)), to what flick they pick for Saturday night (Netflix (NFLX)). And if saving money to buy more stock replaces saving money to buy more stuff, even better.

7. Show your gratitude for your family's gifts every day. The most powerful illustration of the good that comes from giving is gratitude. Share how grateful you are to be able to afford new school supplies and how much you appreciate gifts (tangible and intangible) from others. Talk to them about how you arepaying it forward, and openly share the joy you get from helping others. Being thankful is a lesson worth revisiting year-round.

Motley Fool consumer finance expert Dayana Yochim does not own shares in any company mentioned in this article.

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/This is a very good article and everything is true. Teach your children when they are young and they will grow up able to take care of themselves. I grew up during the great depression and was taught the value of a dollar. 10 percent of all money I earned or got as a gift had to be saved. To this day I value a gift that was hand made by the person giving it to me then something they would buy.

December 05 2011 at 12:59 PM Report abuse rate up rate down Reply

Save every dime you can. Don't buy stupid crap you dodn't need. Shop around for the best deals and be frugal. If you have to give to a charity pick it wisely and ask to see financials of where the money goes. You'd be surprised at the salaries of some of the scum that run our Nation's "trusted" charities. And never, ever, give money to some mega-church. You whine about GE not paying taxes, take a look at the tax-exempt holding groups for Millionaire preachers.

December 05 2011 at 7:43 AM Report abuse rate up rate down Reply


December 04 2011 at 10:51 PM Report abuse +1 rate up rate down Reply
1 reply to alucky1128f8@aol's comment

Yes because if we all go to church GOD will solve all of our personal financial issues and we will never go into debt. Let me guess you bought a mortgage back home between 2002-2008, and you have since defaulted on it, which you could not ever have afforded?

December 05 2011 at 5:52 AM Report abuse rate up rate down Reply
1 reply to J.M.Keyes's comment


December 05 2011 at 12:07 PM Report abuse rate up rate down

I wish this president learned these important traits. He's added more debt to this country then all the
prior presidents combined.

December 04 2011 at 10:40 PM Report abuse +1 rate up rate down Reply

Kids also learn from what they see their parents do, or not do. our 2 kids always thought many of their friends were better off because all the new cars, and new things their friends had. Then as they got a liitle older and understood basic financial planning, no debt, wants vs. needs, etc. They then realized it was mostly flash, not wealth and which is better. Our 2 kids are now young adults. One is a 28 year old doctor that drives Chevy Cobalt, been a home owner for 7 years (bought a house while in school and rented out the rooms to fellow students), almost no student debt coming out of med school, etc. They also learned form what they saw their parents do, or not do.

December 04 2011 at 12:28 PM Report abuse +1 rate up rate down Reply
1 reply to vlady1000's comment

I was raised in this exact manner and now that exact image. Growing up and seeing the big difference between a want and a need helped me through out my life and has led me to having steady financial life.

December 05 2011 at 5:54 AM Report abuse rate up rate down Reply

How will I handle deflation. My children are already asking about how can we afford to go to school if our dollar is only worth one cent in years to come. I told them to get out and vote, get involved at all levels of government, and don't believe the lies.I also teach them what our founding fathers wrote and how to apply it in todays world, as they don't get that in a lot of public schooling. My children are six and eight. I am so happy when they point at some people on magazines, newspapers and television tell me that that person is lying.

December 04 2011 at 7:00 AM Report abuse +2 rate up rate down Reply

Wish I had thought of this with my kids, but didn't until my great-granddaughter. I started her on a piggy-bank collection. Then, when she was old enough (about age 3 with her - some will be older, some younger), whenever she received money as a gift (and the family made sure that she did once in awhile), a third of it (or as close as possible) went into one bank to save for whatever she wanted, a third went into another bank to save for gifts for others, and the last third went into another bank to give to charity! She picked which bank would hold which money and, of course, needed reminders for about two years, but she finally got it. Now, at age 8, she has 9 piggy banks and they are evenly divided among self, gifts, and charity. And, I'm proud to say, very often she skips the "self" bank and divides the money between the other two because she thinks they're more important -- and she uses the money in those banks for exactly what it was intended to be used for! She did use money from the "self" bank for herself just twice in all those years - the first time was for candy (she was 6!) and then, -- about four months ago -- she wanted a Justin Bieber backpack. Her grandmother (who is raising her) refused to buy it as she already had a backpack, so she bought it with her own money. No problem!

December 03 2011 at 4:39 PM Report abuse +1 rate up rate down Reply

I am 24 and I will never invest in the stock market. It is just like gambling in Las Vegas, you either win or you lose. If the economy sucks like it does now, how does that guarantee me for the rest of my life after I retire one day in the far future? Teaching children to invest in the stock market is not a smart thing to do at this point. Yes, I am sure it will reward your child over the course of his or her lifetime, but you are risking your child's future welfare when he or she grows up to be an adult, whether the child will use it for his or her college education or take that money and use it to ge an apartment, furniture, pots and pans, etc.

If there is enough money in the investment that the child wants to use it to attend an Ivy league university, then that is up to him/her. An Ivy league university is very expensive, it costed my aunt to have my cousin get her PhD about a year and a half ago about $35K/year. She must have had an extended time because it normally takes three years to get a master's degree, so she must have had a combined program where she combined master's degree with a PhD, she spent six years going to school and working toward her degree. She now works at Henry Ford Hospital in downtown Detroit for a two year post graduate fellowhip, whatever that means.

December 03 2011 at 9:33 AM Report abuse -1 rate up rate down Reply
1 reply to sdowns1470's comment

The difference between the stock market and Vegas is the amount of information you are given to conceive an out come. Children shouldn't be investing, only people who understand accounting, management, and the markets should be investing. The Stock Market is a system that rewards EDUCATED RISK, their are ways to limit and cover losses. It is an incredibly complex system which if used write can earn you a much better rate of return than you can conceive.

December 05 2011 at 5:59 AM Report abuse rate up rate down Reply

After rendering unto Cesar and save what you can. Usually, nothing is left..

December 03 2011 at 12:36 AM Report abuse +3 rate up rate down Reply

The best personal finance book I've ever read is THE RICHEST MAN IN BABYLON by George S. Classon. It is a thin book available for $6.95 at most book stores. Anyone over 10 can read in a few hours. If you follow his simple rules of "paying yourself first" you will automatically save money without ever missing it and within 20-30 years you will be able to retire even if you never make a large salary in your career.

Another great book is THE MILLIONAIR NEXT DOOR by Dr. Stanley. It explains that most millionaires live a modest life in a modest home and drive their used cars for 7 years or more. Most own small non-exciting business such as auto repair, dry cleaning, warehousing, etc., don't eat out much and within 20-30 years obtain a net worth od a million Dollars or more. The wannabe's that wear Rolex's, drive Hummers and live in McMansions rarely have much net worth. If you read these 2 books and take them to heart they will help much more than a bachelor's degree and will set you back quite a bit less.

December 02 2011 at 8:20 PM Report abuse +3 rate up rate down Reply
1 reply to rickpetersonms's comment


December 02 2011 at 9:48 PM Report abuse +3 rate up rate down Reply