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Kids and Money: How to Save for 3 Different Goals

Citi's Women & Co.

This article, written by Kelly Whalen, was originally published on Citi’s Women & Co.

The value of the dollar is challenging for children to grasp. Young kids often don’t comprehend the ways in which saving and spending can impact our lives. They may see us purchase groceries or buy the occasional toy or treat, but they don’t see us paying the mortgage or saving for retirement.

On April 11, Citi will join forces with the American Bankers Association to celebrate the 18th annual Teach Children to Save Day. With support from Citi Community Development, hundreds of Citi employees will volunteer to work with youth across the country to teach the financial facts of life. In honor of the occasion, we’ve compiled tips to help kids reach savings goals in three different categories.

Toys and games

According to a recent survey of more than 1,500 parents released by Citi Community Development in support of the Teach Children to Save campaign, toys and games are the #1 purchase that kids are saving their money towards. They’re a currency that kids can understand, and a great way to teach them the basics of saving and spending wisely.

  • Make a list or take photos: Tracking and curating wants can ease the “gimmes” and help teach kids to be selective when it’s time to shop.
  • Pay an allowance: An allowance is an easy way for kids to learn to manage money. According to the Citi Community Development survey, 6 out of 10 parents give their kids an allowance. Sixty-nine percent tie it to doing chores around the house; and an additional 20 percent tie it to good grades or good behavior.
  • Set clear expectations: Whether kids are spending their own money or yours, it’s best to set some rules — like saving 25 percent of their money. In other words, if your child has managed to put aside $20, he or she may purchase a toy that costs $15 or less, leaving at least $5 as a foundation for future savings.
  • Offer incentives: Challenge your kids with a bonus. For instance, if they choose not to spend the $10 you’ve given them, you’ll pony up an extra $5. The catch? It has to go into savings.


Before kids are even tweens these days, it seems their wants go from a few bucks to a few hundred—or more!—for items like smartphones, laptops, game systems, and headphones. Many parents find themselves distraught at the idea of purchasing pricey, often fragile electronics and putting them in the hands of young kids. Some suggestions on how to stop the madness:

  • Shift responsibility: While it’s tempting to pay for your kids’ electronics, if you teach them to save up for their own devices they’ll value them more.
  • Match savings: Create a savings threshold and offer to match it so your children can reach their goals more easily. Maybe you throw in the extra 25 percent once they reach 75 percent of their goal, for example, or you match them dollar for dollar.
  • Turn kids’ devices into money managers: Once they’re old enough, use apps and online financial management tools to enable your kids to manage their own money with their electronics—a win-win! If they’re a bit young for this task, you can show them how you use online banking and apps to give them a real-life snapshot of the way “grownup” finances are structured.

Sports and athletic equipment

Sports instill great values, but they generally come with an expensive price tag, especially the clothes, shoes, and gear with coveted brand logos and endorsements by famous athletes. Equipment, lesson fees, and team fees can add up fast.

  • Work it for a discount: When teens are of age they can get part-time jobs to help offset the cost of their gear. Not only can they earn extra money to buy what they need and want, but they may also get jobs that have perks. Working as an assistant coach or teaching sports skills are ways teens can earn steep discounts or get their team fees covered.
  • Reinforce savings: While those brand-name shoes may seem worth it to your kids, footing the bill for them is most likely not in your budget. Take your children shopping with a spending limit or allowance and teach them how to look for deals and discounts. Using coupons and rewards programs, shopping online, and buying secondhand are all ways to save big. You can motivate your kids to save more by allowing them to pocket the difference: If you have a budget of $100 and the shoes come in at $65, they get to keep the extra $35 (as long as it goes into their savings account).
  • Be choosy: While it’s tempting to put your kids in every activity and allow them to try a variety of sports, it can lead to burnout for them and an empty wallet for you. Instead, stick to one sports activity each season when kids are young. As they get older they can “specialize” in one or two sports each year.

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