How to Set a Savings Goal with Your Child: A Step-by-Step Guide for Parents
There’s a special moment that every parent experiences when they help their child set their first savings goal. It’s a mix of excitement and nostalgia—a milestone that shows your little one is growing up and ready to learn something big: the value of money.
It starts with a conversation—maybe they’ve been asking for a new toy, or saving for a game, or even mentioning that cool gadget their friends have. You see the spark in their eyes, and suddenly, you realize: this is a perfect opportunity to teach them about saving.
When you involve them in the process of setting a savings goal, it becomes a fun and engaging way to help them learn important life skills. Plus, you get to bond over the experience and celebrate their achievements along the way.
In this guide, we’ll walk through practical steps to help you and your child set a meaningful savings goal that is both attainable and rewarding. Let’s get started!
Step 1: Start with a Conversation About Money
The first step in setting a savings goal is to have an open and friendly conversation about money. It’s important to create a comfortable environment where your child feels safe discussing their thoughts and feelings about finances. Here’s how to approach this:
Make it Relatable: Begin by sharing why money is important. You can explain that money helps us buy things we need, like food, clothes, and school supplies, as well as things we want, like toys, sweet and fun experiences. Use examples from your child’s everyday life to make it relatable. For instance, if they’ve mentioned wanting a new game, you can tie that into the conversation about how saving can help them achieve that.
Encourage Questions: As you discuss money, invite your child to ask questions. What do they already know about money? Do they have any concerns or misconceptions? By allowing them to express their thoughts, you can address any worries and clarify any misunderstandings. This open dialogue will help them feel more comfortable discussing money matters in the future.
Set the Tone: Make this conversation light and enjoyable. You might use playful language or share funny stories about your own saving experiences when you were younger. The goal is to make your child feel excited about the possibilities that saving can bring, not overwhelmed or anxious about money.
Starting with this conversation will make your child more receptive to the idea of saving and give them the confidence to take ownership of their financial journey.
Step 2: Help Them Identify a Savings Goal
Once you’ve had the conversation about money, it’s time to help your child identify a specific savings goal. This step is essential because it gives them something tangible to work towards and makes saving feel purposeful. Here’s how to guide them through this process:
Brainstorm Together: Start by asking your child what they want to save for. It could be something they’ve been eyeing at the store, a new game, a toy, or even a fun outing. Encourage them to think big and small. Write down all their ideas on a piece of paper or a whiteboard. Seeing their options can spark excitement and creativity.
Discuss Values and Interests: Help your child reflect on what they value most. Ask questions like, “What makes you happy?” or “What do you enjoy doing the most?” This can lead to goals that resonate more personally. For example, if your child loves art, they might want to save for a new art set. If they enjoy sports, maybe it’s new gear or a ticket to a game.
Narrow Down the Choices: After brainstorming, encourage your child to narrow down their list to one or two goals. You can guide them by asking, “Which of these goals are you most excited about?” or “Which one do you think will make you happiest when you finally have it?” Help them choose a goal that is both exciting and realistic to achieve within a specific timeframe.
Set a Clear Goal: Once they’ve chosen a goal, help them articulate it clearly. Instead of saying, “I want a new toy,” they could say, “I want to save ₦5,000 for that action figure in two months time.” A clear and specific goal will keep them motivated as they work towards it.
Visualize the Goal: Encourage your child to visualize their goal. They can create a drawing or a collage of pictures related to what they want to save for. This not only makes the goal more tangible but also adds a personal touch that can keep them motivated throughout the saving process.
Step 3: Break Down the Goal into Manageable Steps
Once your child has a clear savings goal, the next step is to break it down into manageable steps. This helps them understand that achieving their goal is possible and not as overwhelming as it might seem. Here’s how to do it:
Determine the Total Amount Needed: Start by reviewing the total amount required to achieve the goal. For instance, if your child wants to save ₦5,000 for a toy, make sure they understand this number. Discuss how that amount relates to their saving efforts.
Set a Timeline: Talk with your child about when they want to achieve this goal. Is it something they’d like to buy in a month, two months, or maybe even longer? Establishing a timeline creates a sense of urgency and helps them stay focused.
Calculate Weekly or Monthly Savings: Help your child figure out how much they need to save each week or month to reach their goal. If the goal is ₦5,000 in two months, they need to save ₦2,500 per month or about ₦625 per week. This visual representation makes tracking progress easier and more engaging.
Explore Ways to Save: Encourage your child to think creatively about how they can save money. Discuss possible sources of income, such as doing extra chores around the house, or through side-gigs. These activities not only help them earn money but also instill a sense of responsibility and achievement.
Set Up a Savings Account: Create a dedicated space for their savings, like a jar, piggy bank, or a savings account if they’re older. For the savings account, the Earlybean app is a great place to start. They can easily track their progress towards their goal with milestones and you can support them on their journey. If you use a jar or piggy bank, consider decorating it together to make it special. Label it with their goal to serve as a visual reminder of what they’re saving for.
Check-in Regularly: Schedule regular check-ins to review progress towards the goal. This can be once a week or every month. Celebrate small milestones along the way, such as reaching half of the amount saved. This will keep the momentum going and reinforce the positive behavior of saving.
Step 4: Encourage Consistent Savings
Now that your child has identified a savings goal, it’s time to instill the habit of consistent savings. This is crucial for helping them reach their goals. Here are some practical steps to encourage regular savings:
Set Up a Savings Challenge: Make saving exciting by introducing a savings challenge. For instance, you could challenge your child to save a certain amount each week for a month. You can start small, like saving ₦200 the first week, ₦500 the second, and so on. If they complete the challenge, you can reward them with a small treat or a family outing. This adds an element of fun while reinforcing the importance of saving consistently.
Use Visual Aids: Create a visual savings tracker that your child can fill in as they save. This could be a chart, a graph, or even stickers that represent milestones. Visual aids serve as a motivational tool, allowing them to see their progress towards their goal. You can also encourage them to decorate their tracker to make it personal and engaging.
Celebrate Milestones: Recognize and celebrate their achievements, no matter how small. If they reach a certain amount saved, celebrate with their favourite food or snack. Celebrating milestones not only reinforces positive behavior but also helps them understand the joy of working towards a goal.
Discuss Unexpected Money: Teach your child to consider unexpected money, like gifts or allowances, as opportunities to save more. Encourage them to set aside a portion of these money toward their savings goal. For example, if they receive ₦2,000 for their birthday, discuss how they could save ₦1,000 and spend ₦1,000.
Incorporate Technology: If your child enjoys technology, consider using apps designed for savings like the Earlybean app. With the Earlybean app, they can gamify savings and track their progress in an interactive way. This can make the process more engaging.
Step 5: Use Real-Life Examples to Reinforce the Lesson
One of the best ways to teach your child about saving is to use real-life examples that are relevant to their everyday experiences. This helps them see the practical application of their savings goals and makes the lessons more relatable. Here are some effective ways to do this:
Share Personal Stories: Talk about your own experiences with saving. Share times when you had to save up for something important, like a new appliance, a vacation, or even new device. Explain the process you went through, including the challenges you faced and how rewarding it felt to achieve your goal. Personal stories can make the concept of saving more tangible and show your child that everyone goes through similar experiences.
Discuss Family Goals: Involve your child in family savings goals. For example, if your family plans to going for outing, talk about how everyone can contribute to that goal. Explain how saving for a trip requires teamwork and commitment from everyone involved. Encourage your child to think about how they could contribute, whether by saving their allowance or doing extra chores to earn money. This not only reinforces the lesson but also helps them feel included in family decisions.
Use Current Events: Discuss examples from news stories or community events that highlight the importance of saving. For instance, if there’s a story about a local charity, explain how the community came together to save money and help those in need. This shows your child that saving isn't just about personal goals; it can also have a positive impact on others.
Remember that this journey is not just about accumulating money but also about nurturing a mindset of responsibility, patience, and perseverance. But it’s not always easy. There will be moments when they’re tempted to spend their savings on something else. That’s where your guidance comes in. You’ll remind them of the bigger picture—of how good it will feel when they reach their goal. And even when they stumble, you’ll be there to support them, teaching them that it’s okay to make mistakes as long as they keep trying.
By the time they finally reach their goal, both of you will feel the pride. It’s not just about the toy or gadget they’ve saved for. It’s the lesson that with a little patience and discipline, they can accomplish anything they set their minds to.
And in that moment, you’ll realize something important: you didn’t just help your child save for something they wanted. You helped them take their first step towards financial independence—a lesson that will last far longer than any toy ever could.