214. Stop Telling Your Kids to “Save Their Money”

Telling your kids to “save your money” is not enough. If they don’t understand what they’re saving for, what they’re giving up today, and what waiting makes possible tomorrow, saving will feel confusing, boring, or even like punishment.

In this episode of Money and Legacy, Laura breaks down how to teach kids the real-life skill of saving money in a way they can actually understand. Instead of forcing kids to save every dollar, this conversation helps parents guide their children through short-term savings goals, spending temptations, trade-offs, delayed gratification, and long-term savings like 529 accounts or investment accounts.

You’ll learn how to help your child choose a savings goal, break it into small milestones, track progress, and make spending decisions without shame. Because the goal is not perfect obedience — it’s decision-making. Your kids do not need to become perfect savers. They need to learn that money gives them choices, and that future them benefits from what current them is willing to wait for.  

In this episode, you’ll learn:

•  Why saving money only makes sense to kids when it is attached to something they actually want 
•  How to teach kids the trade-off between spending now and saving for later 
•  Why short-term savings teaches kids how to wait, while long-term savings teaches them why waiting matters

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Transcript

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0:00

Telling kids to save money is not enough. They need to understand what they're saving for, what they're giving up today, and what waiting makes possible tomorrow

Laura 0:11

You are listening to the Money and Legacy Podcast with Laura Sexton. I'm helping families pay off debt, grow wealth, and build a legacy without sacrificing what matters most. This is where money feels easy.

0:26

Hey, legacy builders. Last week, we talked about showing our kids how money works instead of just lecturing them about it, and today I wanted to take on one specific money skill and break it down. Today, we're gonna talk about saving, because I think a lot of us tell our kids to save your money, but they're like, "Save it for what, and why, and how long, and how do I even do that, and what do you mean?" What happens if they wanna spend the money, and, and what are they actually learning? I do not want my kids saving just because I tell them to. I want them to understand why saving matters, because that will help them do it in the future Saving for the sake of saving does not make much sense to a child and it's really hard for us as adults. So let's try to make it easier for them the younger they are my kids do not have the most beautiful piggy banks. I have this vision in my mind of a piggy bank I want. It's made out of wood, and it's got these custom little sections where there's a give, and a save, and a spend, and I have it in my head. That's how I want it one day. But for right now, you know what my kids are using? They're using the Costco-size M&M containers. That's right. Screw on lid, put the money inside, screw the lid back on. The problem is when the money starts piling up. They see it just sitting there, and they want to spend it, especially my spender. The second she has a dollar in her pocket, she needs to go to Five Below, 'cause there's something there she can buy, I'm sure. So they see it sitting there, and we tell them they're not allowed to spend it, so of course they're confused. There has to be a reason behind the waiting, especially the younger they are. So saving makes sense when it's attached to something they actually want. So let them choose something real, a toy, a Lego set. For the older kids, maybe a bicycle or a video game. A sort of experience maybe. We drive past this high ropes course all the time, and one of my kids asked me the other day if we could save up money and go there. Maybe that's something they wanna do. Whatever it is they are saving for, it has to be something fun and something they can actually obtain. They are not allowed to save up money for a spaceship. They are not Phineas and Ferb. There is no Perry the Platypus coming to help them out. They are not going to be able to save up for a spaceship. So they come up with something they want. For today, let's call it a Lego set. First thing we have to do, we have to figure out how much that Lego set costs. And then where are we starting from? How much money do you already have? What is the difference between how much it costs and how much we have? And then let's break that down into different milestones. And once those milestones are broken down, we're gonna let them track their progress. Now you're saying, "Laura, yeah, I, I get that to save money for something we have to know how much it costs, and then we have to break down how much we have, and then save up the rest." I get that. Yeah, you get that in theory, but are you actually doing it? Is this something that you do in practice, or is this something you just do some mental math in your brain real quick and then you move on? Because our kids don't do mental math the same way we do. In fact, my kids don't do a lot of mental math at all. We're working on it. But as we break it down into smaller milestones, let's say the Lego set's 50 bucks, and right now they have 20. That's a big gap, right? First of all, why are Lego sets so expensive? And second of all, if your kids have $20 and they want something that's gonna cost $50, it's going to take a while, so we want to keep them motivated and keep them moving. So you want to break down into smaller milestones. When they get to $25, guess what? We're halfway. We should celebrate that. And then from there, you get to decide how much you want to break that down. Another $5? Great. Let's celebrate. We have to talk with them about smaller milestones and how to track the progress. You can do the progress tracker on a simple chain, where every time they get a dollar, they can break off a construction paper chain, or you can have a fill-it-in sheet. I think for younger kids, it's really great to use a jar or stickers on a chart. W- we want them to have cash that they can count. So for little kids, $1 bills is actually easier than some of the bigger bills. Now, little, little, little kids should not save for anything over $20. But for our older kids, let's shoot for the moon. You wanna save up money for a bicycle? Let's go for it. And they may be old enough where they can use a spreadsheet on the computer. They may be able to use a notes app to follow along, or they may be able to use a savings account and just go check the balance occasionally. Regardless of what method you use, you wanna make the goal close enough that waiting feels possible. So I said with the younger kids, we wanna keep it a small goal with a small amount. Older kids can be a little bit more, but we wanna make sure they're getting the idea of this early on Okay, so this is where saving actually becomes the money lesson. You have to teach the trade-off. They have $20 saved towards a $50 goal, and they see something for $12 that they just want today. What do they do? I don't want you to immediately tell them no. I want you to talk through it with them Okay? If you go today to buy that $12 game, which looks awesome and it's super fun, but we're saving up money for the Legos, what do you think happens to the Legos that we're saving up for? Let them tell you what they think. Let them tell you about how much time they think it'll take between now and when they get the Legos. And then here's the important piece, let them choose. If they choose to spend the money, let them spend it. I want you to do so without shame. Do not immediately replace what they spent either, and do not rescue them because now they're disappointed. The disappointment is part of the learning. This is the weight on the squat rack helping them get stronger The thing that you need to explain to them and help them learn through their decision to either spend it or not is future you only gets the money current you chooses not to spend. Some of us parents need to remember that as well We need to let the kids change their mind because it's, and they're going to. Saving is not a prison sentence. They are not committed to one thing and they can never change their mind. Maybe halfway through they decide that that original Lego set is not the thing they want anymore, and that's okay. Let them choose a new goal, but do not let them get rid of the goal entirely, and here is why If they are disappointed that they cannot get the thing they want because they chose to get something else, so they really wanted that Lego set and they were working on saving for it, but then they stopped in the middle of the saving and they decided they were going to spend their $12 on a game, so now they only have $8 and they're trying to get to 50, that's a really long way Do not let them decide that saving is impossible. Do not let them decide that they can never make it. Do not let them give up on themselves. Let them choose a new goal. Talk about why, and teach them how money is a tool. They are not going to be perfect and complete every single savings goal. I'm not perfect. I don't complete all of my savings goals. But the lesson is learning to make the intentional choices. The goal is not obedience, it is decision-making. And it's depending on mom and dad to help you make a good decision as well Short-term saving has to be tangible, has to be something we can look at, feel, touch. But long-term savings, that requires a little bit more imagination. So if you have created a 529 account for your kids, show it to them. If you have an UTMA or some sort of investment account, any money that you are holding for their future, let them see it. Let them see how much you've contributed, what it's worth now, so what the investment has created, the compound interest. Let them see how it's changed over time. This is going to be one of those really fun lessons because we understand compound interest. They don't need to understand how that works today, okay? Just let them see that the money is growing while they're leaving it alone. For example, our kids' 529 accounts What we have right now, it's not where I ultimately want them to be. I have five children that I'm going to have to put through college. I'm going to need more money than what I have right now. But here's the deal. My kids can see their individual 529 account, and they can see the money that has been set aside for future them. This is the difference between short-term savings and long-term savings. Short-term teaches kids how to wait, and long-term savings teaches them why waiting matters. We want to show them both. Now, don't force savings, because then they're gonna hate it. We want to guide them, not control them. Saving every penny forever, that's not a lesson, that's oppression. Spending is not bad. Some of our kids are natural-born spenders, and it's beautiful. And some of our kids are natural-born savers, and that's beautiful. Enjoying money the way that we choose to enjoy money is not a bad thing However, it can become a bad thing. If you teach your children that saving is the only thing that matters, those kids that are natural savers will start to find their identity in that, and everything they do will become saving, saving, saving, and they have the potential of becoming very miserly and not generous people. And those kids that are spenders, but you're telling them, "You have to save, you have to save, you have to save," they start to feel shame and guilt over these desires to spend. So I don't want you to tell them that any of this is good or bad, because how we act is a positive or a negative, but money itself is not bad. Enjoying money is not bad. Saving money is not bad. It is the choosing to use this tool in a positive way is going to benefit us in the long run-- in the long term. If they never get to use their money, saving starts to feel like punishment, so they have to be able to save it and spend it. And, you know, the third thing we can do with money is give it away, and it's one of the most beautiful lessons that we can ever teach our children. So this week, ask your child, "Is there something you would like to buy for yourself?" write the goal down, write the price of the item, figure out how much they already have saved, and break the rest into small milestones. You can put the progress somewhere where they can see it frequently, maybe not all the time, but see it frequently. That's also going to help. Then they get to make their own choices. If something tempting comes up before they reach their goal, talk them through the trade-off, but let them decide. And if you are sitting here thinking, "Laura, I'm trying to keep- teach my kids this, but I still feel like I'm figuring money out myself," totally okay. You don't have to worry and have everything mastered before you start teaching them. But if you want help getting clear on your own money so you can model this confidently for your kids, book a free clarity call with me. All you have to do is scroll down in the show notes, click on Clarity Call, or go to my website accelerateyourlegacy.com/claritycall, and we can look at what is happening with your money, where you feel stuck, and what your next right step is. Your kids do not need to become perfect savers. They need to learn that money gives them choices, and they need to experience that while wanting something and waiting for it and changing their mind and spending too much too early sometimes. And then trying again, and eventually seeing that the future them is benefited by what current them is willing to wait for. Parents, you are teaching them how to save for something they care about now, and then show them what saving can do over a lifetime. These are small things we're doing every day to make huge benefits in our life and in our kids' lives. This is how you are going out and making a difference