How to make children save money? - eNidhi India Travel Blog

How to make children save money?

This post is in response to a topic raised by Ashwini, a member at our MoneyTalk India Finance Forum (MTIFF) who sought help how to cultivate a habit of saving in her brother who spends all his pocket money in no time and keeps asking for more money.
I thought about it a bit and here are some tips I could think of, which if used effectively can make youngsters understand the importance of savings.

Tip 1: Reward
Promise to contribute to the savings made by a child – If he/she saves 100 Rs by end of the month add Rs 100 from your side. This reward should encourage him to save more. (Downside: The child should not borrow from elsewhere and show as saving- opening a minor bank account in his name will be very good idea.

Tip 2: Online financial games:
There are some free games online using which one can do virtual trading. Teach him some basics of trading and introduce him to this game-it will be as good as trading in real market except that profit and loss will be virtual. Such games will make him understand the value of money and how markets operate. If he likes the game chances are he will develop a sense of respect towards money and its value?

Tip 3: Mandate book keeping

Insist that the child should give daily or weekly account of all expenditures. This will increase accountability and we’ll be able to identify what expenditures were avoidable, for what there were better alternatives etc and over a period of time it should be possible to improve the spending habit of the child.

Try 4: Running competition among siblings-
If there’re two or more children at home run a competition as to see who will save more. This should encourage them to cut unnecessary expenditure and try to save more.

Tip 5: Provide them with interesting alternative:
Suppose the child is insisting that he needs that overpriced remote control car which is unlikely to last beyond few weeks. Try to trade that money for more meaningful alternative- say I will take you to that amusement park this weekend instead of this toy, or why don’t you try this children laptop instead etc. This will show the child that there’re more meaningful and valuable things which can be secured for same price.

Tip 6: Attribute your success to savings-
Suppose you got a diwali bonus and you’re taking family for dinner-Instead of saying “I am taking you out because I got a bonus” say “I could take you out for this dinner because I have been saving Rs. 250 every month for this” This way a child will realize that small amount when accumulated over a period of time can be exchanged for bigger rewards.

Tip 7: Practice instead of preaching:
Children learn a lot by observing. Control your spending habit and make your child understand that you’re saving regularly for a better tomorrow. Do not indulge in excessive shopping or activities that involve flaunting your wealth. Be a role model by yourself and that should help a lot.

Tip 8: Never give a credit card to kids-

When there’s a need (say when he is staying at a hostel and may need to have some money of his own for emergency needs) stick with debit card. You can always transfer money to his account if there’s a genuine need to spend more.

Cross published on Mouthshut, Desicritics & Indimag

More tips: Saving money while fueling | Caution to be followed in supermarkets |Do travel sites really offer cheapest airfare?


  1. Tip 7 is the best of all :-)
    And probably the most difficult to follow!

  2. This comment has been removed by a blog administrator.

  3. Dont you think these tips are too much to ask for from children? which age group are you suggesting?

  4. Laddoo Madam,

    Totally agreed.

    It is not specific to any age group but can be applied to school going children and above who might need to have some little spare cash with them for vaious reasons.

    And most of them can be applied to adults as well :)

    And about being harsh, that can be decided on a case by case basis. If the child is cautious and doesn't spend much, then we can be more liberal as against someone who spends money in no time and asks for more...

  5. Good collection of tips...

    And thanks for the mention of my name.


  6. Comments received for this post when published in

    seera said:
    Feb 07, 2008 11:22 AM

    B O O K E D !!! W I L L R E T U R N S O O N !!
    Kweldebs said:
    Feb 07, 2008 11:46 AM

    I thinks its a very good idea to induce the thought of saving during childhood. That will also bring a consciousness among them ...
    vikeshikavikeshika said:
    Feb 07, 2008 11:56 AM

    hi @enidhi

    i truly believe this old adage that ’’money saved is money earned’’. .. and the best way to save mney is to indulge in need based shopping rather than shopping for the heck of it..parents should call the shots and children will follow the suit ..

    all your tips are very practicable and useful. made for a gr8 read.



    Chintu25 Star Writer said:
    Feb 07, 2008 12:02 PM

    Hey Nidhi

    Thats a wonderful writeup & very practical too. In fact the tips can be applied and followed by us adults too....saving is a habit which should be inculcated in kids from a very early age...
    Loved the writeup for its sheer simplicity & usefulness

    Apna Sapna More & More Points©

    enidhi said:
    Feb 07, 2008 12:04 PM

    Thanks ladies for your comments...

    Where are the gentlemen ???

    enidhi said:
    Feb 07, 2008 12:09 PM


    Yes, children need to be educated on value of money.. They shouldn’t get a feeling that they’ll get whatever they want if they cry...

    enidhi said:
    Feb 07, 2008 12:10 PM


    Yes, the consumerism we’re indulging today and the habit of spending tomorrow’s income today can have cascading effect on next gen.

    Tiny drops make mighty ocean.

    enidhi said:
    Feb 07, 2008 12:12 PM


    Yes, even adults can follow most of the tips but adults who earn their income would need different kind of spending habit and financial planning vis a vis a kid.
    Paulsb02 Star Writer said:
    Feb 07, 2008 12:52 PM

    Hai Shrinidhi,

    Good topic there...good write up as well.

    Promise them Rs5 per mark they earn..or say Rs. 2/- and we will see how they study to get that...I tested and is getting good dividends out of the offere...

    Keep rocking

    seera said:
    Feb 07, 2008 01:19 PM

    Hi Nidhi,

    Great review.. I liked it more cos I m a not really good at saving... My mom always shouts saying what you do with all the money you earn. I think even I need to pick up few points here and start saving.. :D

    But really a good read. My dad has always made us work hard before we used to get any thing big like a computer, bicycle and Bike. So the joy of earning the perticular stuff has been great. I think this also brings sense of maturity to kids.

    I liked ur review...


    PS: MS people what has happend to all the racers???? No one booking now a days???

    enidhi said:
    Feb 07, 2008 01:29 PM


    Rewarding achievements is of course a good idea...


    enidhi said:
    Feb 07, 2008 01:31 PM


    Thanks a lot...

    btb I am not as popular on MS as many of the star writers so there’s hardly any rush to book space at my reviews...
    vishalvkale01 Star Writer said:
    Feb 07, 2008 06:35 PM

    Hi Enidhi,

    Great thoughts as usual! Most practical tips, too: eminently implementable


    The_Reviewer Star Writer said:
    Feb 09, 2008 04:35 PM

    ’’ Be a role model by yourself and that should help a lot ’’

    That was very well said.
    I have seen parents who hide their poor financial status from their kids. I feel just the opposite. The kids should know what their parents are earning and how. They should understand the efforts of the parents!

    Very nice review there!
    Shanti :)

    enidhi said:
    Feb 11, 2008 10:58 AM

    Thanks a lot Vishal.


    You’re perfectly right.

    Thanks again.


    pri20 said:
    Feb 14, 2008 11:23 PM

    very informative & well-written!! any reccos on the virtual trading games ?? i like the idea of doing chores to earn money, that way kids can find out for themselves that spending is easy and earning isnt ....


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