IE 11 is not supported. For an optimal experience visit our site on another browser.

Teach kids the value of saving ... and giving

As the season of giving brushes elbows with the cabal of commercialism, we're presented with an ideal "teachable moment."
Image: Four-year-old California Croll makes a d
Balancing saving, spending and giving are lifelong skills that are best developed early in life.Mark Ralston / AFP
/ Source: DailyFinance

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

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, and 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) to lunch and snacks (Kraft and Coca-Cola), to entertainment (Disney), to which flick they pick for Saturday night (Netflix). 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 are paying it forward, and openly share the joy you get from helping others. Being thankful is a lesson worth revisiting year-round.