Establishing smart money-saving techniques and good spending habits early in life will empower your children to live debt free and help them to manage their money better. Here are five tips to get them started.

Begin young

Children of different ages will have different understandings of money, but you should start them young by explaining to you children why you go to work. Make it clear to your kids that everything around them costs money. Start off with a small container for them to save their change in, like a piggy bank. If they want a candy at the store, explain to them that they have to save their money in their bank, until you go to the store, and then they can buy the candy.

Help them save

When you feel that they're old enough, get your children their own savings accounts. This is unlike a piggy bank in that they can't go and raid it at the first sound of the ice cream truck; it requires a higher level of commitment. A savings account will make them feel special, and give them a sense of responsibility.

Encourage your children to put some of what they make into their savings. Go one step further and suggest that they put a percentage into savings, keep a certain percentage to enjoy now, and share or give a percentage to a charity or a good cause. A great place to see this process in action is at This is an online chore chart where kids are encouraged to save, spend, and share the money that they earn.

Having a savings account at a bank will also give you an opportunity to explain interest to you children, and how it works. When they realize that their money will be making money just sitting there, without any effort on their part, they may be more willing to leave it there.

Bargain Shop

We've all heard the old adage, "A penny saved is a penny earned." When your kids want a big ticket item, have them do their research. They can look online, at different stores, and at different brands, to see where they can find the best deal. They may be able to find a similar, cheaper alternative to what they were looking for.

For younger children, involve them in your shopping. Instead of always saying "NO" to their requests for you to purchase something for them, give them a job at the grocery store to keep them busy. Ask them to look for the cheapest peanut butter and then they'll probably stop asking for the cookies you just passed by. Have them help unload at the checkout stand to lessen the demands for candy on your way out.

Teach by Example

Discipline yourself, and be an example to your children. Show them your savings account, and inform them when you are making a deposit into the bank. Shop wisely and save for big purchases instead of buying on credit. Impart to your children the restraint it takes to save for a bigger purchase, but how nice it is in the end. They will see you saving, and want to do the same.

Give Them Freedom

Encourage your children to save, but if they decide not to, wait for the teaching moment instead of getting mad at them for not following your advice. Wait until they want something and don't have the money to buy it, and then point out that if they would have saved a little of their birthday money last month, they would probably have enough to go to the movies this weekend. The teaching moment is gone if you bail them out. If they don't have the cash to buy the expensive bike that they want, and ask for your help to cover the difference, make them wait until they've saved up enough money. They will be upset, but in the long run, they will have learned a valuable lesson.

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