Teaching Kids About Saving Money with SmartyPig

A lot of parents wonder when the perfect time is to introduce money into their child's life.  Whether it's giving them a set weekly allowance, a bank account, or even saving up for a bike they wanted to buy forever, introducing money is another developmental milestone for any parent and their child.

So when is the perfect time to talk about money?  Just like transitioning from breast milk to solids and from crawling to walking, your child will give you cues that will let you know when to talk about money.

From my own experience, my daughter was learning about money when I didn't even think she was paying attention--such as the checkout line at the grocery store. She watched me hand money to people, receive money, swipe credit cards, and write checks all the time. Naturally, she mimicked my every actions when she was playing pretend.

Eventually, it transitioned from imaginary play to getting a weekly allowance of a dollar. With that dollar, she would either buy an ice cream bar from a street vendor or she would save a couple months worth of dollars to buy clothes for her Barbie dolls. How old you ask? She was three at the time.

I felt she was ready to learn about the basics of money, but more importantly, she was interested in talking about it, touching it, and using it. At that point, my husband and I signed up for SmartyPig, a free online piggy bank where saving for a specific goal couldn't be simpler.

Even though everything was virtual, we had the satisfaction of seeing our savings grow right before us and we could set goals for pretty much anything we wanted to save up for.  We decided that a college savings would be a perfect goal to start out with (versus saving up for a dollhouse).

We set a realistic college savings goal of $50,000 over the course of fifteen years.  Then we set up a monthly direct deposit from our personal savings into our SmartyPig's college savings goal.  In order to speed things up, we also shared it with our family and friends who wanted to contribute to our goal, in lieu of gifts, via email and Facebook.

Every month, my daughter and I saw how much closer we were getting to our goal and we both felt a sense of accomplishment.  We also started to talk about the importance of saving money and other ways we could reach our goal sooner (such as having a lemonade stand during the summer months).

So whether you want to start off with a ceramic pink piggy bank or, like my family, sign up for a virtual piggy bank, it's never too early or too late to talk about money.  If your child wants to know more about the dollar bill that you are holding onto or wants to swipe your credit card at the checkout line, let them participate.  There is nothing like life education and the more they watch, learn, and participate, the smarter choices they will make when it comes to handling their own financial future.  Knowledge is power!

At what age did you introduce money to your child or teach them about savings?  Did you think it was too early or too late?