Updated on 09.03.10

An Ode to My Son’s Piggy Bank

Trent Hamm

About three months ago, my four year old son saw a toy at a store. He mentioned that he had played with it at a friend’s house and that he wanted one.

But rather than demanding it this minute, he asked how much it would cost. Then, he asked how many allowances he’d have to save to be able to afford it.

He waited the necessary six weeks’ of allowance (plus some pocket money put into his bank by Grandma), then happily went to the store and bought himself a Zhu Zhu Pet. The weird little electronic hamster has spent the last few weeks constantly running around on our floors – and I couldn’t be prouder.

No, I’m not proud that he got a Zhu Zhu Pet – my primary concern there is that I’m going to accidentally step on it and hurt my foot when he’s sending the toy all over the place and I’m walking through the entryway or the dining room.

I’m proud of other things.

I’m proud that he didn’t have a meltdown in the toy area, demanding one now, which is something that we witnessed two other children doing that very day.

I’m proud that he didn’t simply ask for or expect for me to just buy that toy for him.

I’m proud that he knew to save diligently for it and not to spend money along the way – he even pointed out that if he saved his “pocket money” too and went without the small stuff, he’d get the pet sooner.

I’m proud that even though he was really into saving for the toy, he still put money from his allowance aside for college and aside for his favorite charity.

How did we get to this point? I really attribute it to three things.

First, we bring home the point time and time again that everything costs money and that Mom and Dad have to work to earn the money they have. Whenever we consider any purchase of any kind, this is an idea that’s brought up. We also talk about how the more money we spend, the more Mom and Dad have to work, and we also point out that as he gets older, he’ll also be working for money.

Second, we do not give in to any sort of meltdown, crying, or whining. We leave, period. Neither Sarah nor I have any problem with just walking out of the store if either of our two older children melt down, particularly over a material desire. (Our youngest one is four months – the only reason he melts down is when he wants milk or a diaper change.) Our older kids have learned that crying and such only makes their case and their situation worse, so they’ve largely abandoned it. Yes, they still do it sometimes – they’re four and three, after all – but it’s not something that happens often, and it’s usually when they’re tired and acting more on raw emotion.

Third, we help them mark their progress towards specific savings goals. For example, when saving for the Zhu Zhu pet, we made it clear to our son that he would need $8.50 for the pet ($8 for the item, $0.50 for taxes). Each week, they get a small allowance – $0.50 for spending as they wish, $0.50 for saving for a goal, $0.50 for a charity, and $0.50 for college. Each week, he diligently chose to put the free spending money and the saving money into the saving for a goal slot in his bank. Then, he would ask how much more he’d have to save and he started to get quite excited when he was close to the goal. The clear marking of progress – talking about it, seeing money build up in his bank – excited him far more than the delayed gratification brought him down.

It works. If you want your kids to learn how to save, start young and be diligent. Our four year old gets it – it can be done!

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  1. Mary says:

    This is such an adorable story! I’m so impressed that you’re teaching your kids this valuable lesson at such a young age. I recently went through Dave Ramsey’s FPU and he discusses similar ideas on teaching children about money. It makes me have hope for teaching my kids solid principles one day when I am a parent.

    Way to go!

  2. Jules says:

    that’s pretty wild. And good for you! I wish more people would realize that you get far more mileage out of positive reinforcement than you get from spanking :-

  3. Jill Michaux says:

    Gene Melchionne recommends talking to your kids about personal finance and then setting an example by walking the talk http://moneyhealthcentral.com/?p=276/

  4. Kelli says:

    Awesome. I love my parents but in the money area, we didn’t get many lessons except not to talk about it! So kudos for the lessons you are giving your kids and glad your little guy is enjoying the fruits of his efforts to save.

  5. Leah W. says:

    Jules, some kids need spanking (namely, me). And I still think 50 cents per week is a sad allowance at any age, but I have to admit, I am very impressed!

  6. Marilyn says:

    For your son, this lesson will influence more than just his approach to handling his money and purchases. It is a foundation for self-reliance and independence in his future, plus it will set a good example for his younger siblings.
    You should be very proud.

  7. Amy says:

    This is definitely something to be proud of! I think you’ve accomplished something here that will make a huge difference in your kids’ lives in the long term.

  8. Jay says:

    I may be wrong, Leah W.#3, but I think the allowance is $2.00 [$0.50 for EACH of 4 categories]
    This would demonstrate to the children that income has not only the “fun” aspect [spending as they wish] but also “serious” issues that must be addressed [e.g. savings]. “Train up a child in the way he should go…”

  9. Sandra says:

    We did something similar when my 5 yo DD wanted a “pillow pet” which I wasn’t going to buy. She saved her allowances all summer and finally got one last weekend (albeit with a donation from me).

  10. Joyful says:

    I love that you are teaching this to your children. Too bad most of us don’t get this training at such a young age. It would have really helped most of us :-)

  11. Carmen says:

    I think that’s fantastic! Well done to your son.

    Presumably you & Sarah also give 25% of your net income to charity? ;-)

  12. Sarai says:

    It sounds like you’re really taking the time to teach your children some real values and it makes me sad that this isn’t more common! You’re teaching your children a priceless lesson, and one that they’ll take with them for the rest of their lives. I only hope to do the same for my future children (if I have any!).

  13. Susan says:

    To Carmen #5

    In Canada, that 25% we give to charity is our income taxes :)

  14. Raghu Bilhana says:

    What your son did, is a huge thing and will help him a lot in the future.

    Could you please give me some information as to what I can do to raise a kid like that. Are there any books or some thing like that?

    Your guidance will help me a lot.

  15. Raghu Bilhana says:


    At what age did you start giving allowance to your son. Did you ask him to have four categories for his allowance from the moment you gave him allowance?

    Could you please write a detailed article about how to teach your kids to save and teaching kids about delayed gratification.

  16. Johanna says:

    Now that he “gets it,” are you going to continue to force him to save at least 25% of his allowance, or are you going to allow him to spend or save as he chooses?

  17. mary m says:

    good job trent, i would be very proud also.

  18. Mary says:

    That is pretty cool. Cool enough for me to write a comment. Job well done.

  19. Kate says:

    Parenting is about modeling and this is a great example of how it works. I’m not sure that Trent’s son is being forced to put money in each pot…it sounds more like he is being expected to put money in each pot. Could it backfire when he grows up and he realizes that parents aren’t there guiding his every move so he can go out and spend, spend, spend? Perhaps it will and he might do that for a short time. I would think, though, that the years of modeling and expectation would be sitting there in his brain trying to guide him.
    I think about the people who write in whenever this topic comes up, commenting that they wish that their parents had given them some money instruction. Trent and his wife are providing it from a young age in a low key way. Which is good.

  20. Fran says:

    Kudo’s to you and your wife. You lead by example. I believe you should have a forth reason as to why. You do it as a family everyday. I am a teacher and I wish more families would be firm but loving with their children. We would not have the behavioral issues we have in school now.

  21. Steve in W MA says:

    This is a fantastic success for your son in terms of his growth. I’m really impressed with the results of your parenting on this issue, which goes beyond a money issue and and speaks also to your son’s development of his self-responsibility, planning, discipline, goalsetting and just plain grit and determination!

  22. Fiery says:

    I LOVE this story. People think I am crazy for doing much the same thing with my daughter who is the same age as your middle child. They also think it is funny that she chooses to save her $ up to purchase plants over toys. Sometimes she will also take her spending and saving money along with the charity $ and buying food (using coupons) for the animals at the animal shelter. All this has also made her much more conscious about where money comes and goes. It’s also netted her some extra $ (she told someone who threw away a soda bottle that they were throwing away $, they ended up giving her a huge bag of bottles, which she returned for $).

    It’s so wonderful to see her understanding concepts like this. It doesn’t mean she never struggles with wanting others to just buy her something, though I will say it definitely lessens the frequency. She often sees something and will say “I have to save for that”.

  23. wow … my four going on five year old is nowhere close to this and I definitely see that I have my work cut out with him.

    However he’s recently got a piggy bank of his own now and we’ve only just started a reward chart and allowances’ so hopefully the ball is rolling in the right direction.

    Thanks for your posting as it will inspire me that there is hope in the future! :)

  24. Meredith says:

    I find it hilarious that someone thinks a four-year-old now “gets it” to the point he can “spend and save as he chooses.” I don’t mean to be offensive, but man… he’s FOUR and still needs a lot more guidance.

    The fact he’s making responsible choices at four is setting a great piece of groundwork for the future, though, and certainly reflects reasonable and exceptional parenting.

  25. Carmen says:

    Johanna – lol! :-)

    Kate – as I understand it, it is forced because his son does not have a choice in not splitting the money to cover saving and charity.

    Having said that, I can see a lot of benefit in the method so don’t have a huge issue with it, but I don’t think it’s entirely honest in its portrayal, so is not something I would do for that reason alone. I could easily see kids rebelling against the control in their adulthood.

    Technically, his allowance is 50 cents a week since that is the money he can save/spend/giveaway AS HE WISHES, with further money being saved for different timeframes, in different directions.

    I would be much more comfortable telling my child that I put money away for them each week that they can give to charity and spend at college, especially at 4 years of age. I’m not sure many 4 year olds know what university/college is, let alone the financial implications of going.

    Anyway, it’s old ground. Sorry for going on. I think his son showed good focus in saving for the toy.

  26. M E 2 says:

    Kudos. Not only am I impressed by his willpower, I am impressed that he didn’t whine and/or have a meltdown. Well done. :)

  27. Sara says:

    @Raghu: Trent has written a few detailed articles about his kids’ allowance. Type “allowance” into the search box. The articles you probably want to read are “The Beginning of the Allowance” and “Starting a Lifetime Savings Journey.”

    It will be interesting to see how Trent’s kids’ money management skills turn out. I don’t know anything about parenting, but this allowance scheme seems like it could work pretty well. The kids are forced to save, but given control over how they spend their money, so they shouldn’t feel deprived or get the urge to go crazy with spending once they move out.

    I do think that once they get older, the allowance should be tied to chores, or they should get jobs to earn spending money. I think it’s really important for kids to learn to associate money with work. It is a whole new perspective to realize how hard they worked for their money (and how hard they’ll have to work to replace it) instead of just knowing that daddy will give them more next week.

  28. Deborah says:

    Awesome! Bravo, Trent! Bravo, to your son! I only wish more parents could read this and apply.

  29. Jenn says:

    Love it! My daughter does the same thing… she bought her own I-pod touch a couple of years ago using the same process. She was eleven at the time. The other part to the learning experience is that kids who buy their own “toys” also take better care of those items. It really does mean more when they have spent their own money. Makes me cringe to hear my daughter speak of her friends who drop/lose their expensive electronics, and their parents replace it again. Ouch.

  30. Matt says:

    @ #25 Carmen – I don’t see how this is dishonest in its portrayal. Trent has explained to his kids exactly what goes on with each part of their allowance. They may not yet understand what “college” is, but they understand they are saving for something in the far-away future. Clearly the kids DO understand the concepts of goal-oriented savings and putting aside money for charity.

    I think this is a great concept and will probably use a similar model when my daughter gets older. She’s not 2 yet, so there’s not much point now… the only thing she knows is that any change she finds on the ground/floor goes in her piggy bank! :)

  31. Matt says:

    Follow-up to above: Those who suggest that Trent shouldn’t “force” his kids to budget/give away some of their money need to think about the fact that the whole idea of an allowance is to help train you for the real world. Nowhere in the real world do you get to keep all your money – some (or most) of it has pre-defined categories it has to go against (mortgage/rent, food, taxes, etc). Learning that lesson as kids – and taking it for granted rather than resenting it – is enormously valuable.

  32. Johanna says:

    @Matt: My parents never required me to divide up my allowance in any specific way, and I assure you that as an adult I’ve never resented having to pay rent and taxes. Not every money lesson has to come at the same time. Seriously, Trent’s son is 4 years old. He has 14 more years, at least, to learn about paying rent and taxes.

    I do think it’s a great sign that he put aside his whole allowance, not just the portion he was required to put aside, to save for the toy. It really does seem like he “gets it.” And I think it would be an entirely appropriate reward for Trent to let him “graduate” to being able to spend or save a whole dollar of his allowance as he chooses. Continuing to require him to put aside at least 50 cents is basically saying “I don’t trust you to successfully save for a short-term goal, even though you’ve already proven that you can.”

  33. Kai says:

    I think at four years old, even if he’s showing that he’s getting it, it’s still reasonable to build up a pattern of saving for a while. Sure, I too think that as he gets older, it will have to transform into free allowance with the choice to give to charity or not, and to save or spend. Then the kids will have to make some mistakes for the lessons to really resound.

    But that doesn’t need to happen at four. In more years, as the pattern has set in, he sees the value, and saving has come to be seen as the norm, then it can change. He’s still pretty young right now.

    I also like the idea of letting older kids borrow (with interest) from the parents. Get an idea how loans work, and how much more difficult it is to pay back in the long run.
    I think there was a book called the Bank of Dad or something that had some great ideas about this stuff.

  34. Odin says:

    $.50 a week for college? Wow, at that rate you may have $400 saved by the time he is 18. Just enough for a couple of books. I hope you’re teaching valuable lessons about student loans as well.

  35. Georgia says:

    Odin – he doesn’t plan on keeping the allowance at $2 for the rest of his son’s life at home. But $2 is very extravagant, in my opinion, for a 4 y/o. Make the foundation secure and the building on top of it will last. Trent is pushing this angle.

    Sara #27 – I read an article one time to show parents how to tie work and money together. She said children should do much work at home that is not paid for. They are part of the family and should contribute. But she advised picking several jobs you do that they could do as well. For instance, washing windows. Pick a rate – say 10 cents a window (this was an older article). The child who did that window would get the dime. The child who was too lazy to do the work would not. If you have 2 or more children, this teaches all of them that work equals money in the pocket.

    Since I never ever received an allowance and only let my children have a set amount each week for lunches at school, school supplies, fun, etc. to get them into the idea of money matters, my knowledge in this area is small.

  36. Good to see intelligent parenting alive and well in some places.

  37. Shana says:

    Hey Trent! Thanks for the shout-out for Jump for Joel! Tell your son we said hello & that the kids in Kenya are doing well!

  38. Elena says:

    A great resource that was not mentioned in the article is http://www.threejars.com teaches kids to save, spend, and share.

  39. Rachel says:

    Even if he is only getting $0.50 of actual spending money a week, that’s still a totally reasonable sum for a 4 year old! After all, that’s exclusively for ‘wants’, not ‘needs’ given that his parents pay for all of his needs.

    And Odin – although I don’t know Trent, I assume, like Georgia mentioned, that the sum will increase as his son gets older. I didn’t receive any allowance when I was 4, but by the time I was old enough to contribute regularly to chores, I started getting an allowance.

    This allowance increased as I took on more responsibility in the home, but it peaked at $10 a week when I was in my teen years, and I was expected to save portions of it for future goals, like university. If I didn’t do my chores, I didn’t get my allowance. If I needed to save up extra money for something (like new clothes), I could earn a bit of extra spending money by taking on a major extra chore that wasn’t part of my usual chores, like cleaning out and organizing the garage.

    My mom currently uses a similar system with my 11 year-old brother. He technically only has two mandatory categories, savings and spending, but he made his own decision to add a third category for charity.

    I’m very grateful to my parents for teaching me financial responsibility when I was young. I actually have friends my age (I’m 23!) whose parents pay their rent and expenses for them, AND give them an ‘allowance’ each week! It’s absolutely shocking that parents would baby their ‘adult’ children that much.

    And good for you Trent, for not giving in to temper tantrums. It drives me up the wall when I see a child throwing a temper tantrum in public, and then I see the parent giving the child what they want to make them stop.

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