Why We Save

My five year old son is saving diligently to own a Nintendo DS Lite video game system. One of his cousins gave him a baggie with several games that would be playable on that system and he’s longing to play them, so he’s been saving.

That system, new, costs $100. We can find reliable used ones with a warranty for $60 (sometimes) or $70 (most of the time).

His allowance – at least, the portion he’s able to use to save for such a purpose – is $2 a week.

Here’s the amazing part. He’s already hit the $35 mark and he’s quietly putting his $2 a week away into a bag for that purchase. That’s several months of not buying anything else with his allowance, with several months yet to go.

A five year old is so focused on a savings goal that he hasn’t spent a dime of his allowance on candy or inexpensive toys in several months.

(At the same time, incidentally, his younger sister, only three, isn’t spending her tiny allowance either, though she doesn’t have an explicit goal. She has about $20 saved up for some future splurge.)

Something’s going right here.

This Sunday (since Sundays are allowance days), we had a conversation about this as allowance money was being handed out. My five year old was putting his money away into his savings pouch when I asked him how he felt the savings was going.

“It’s taking a long time,” he said.

“Have you ever thought about spending it on something else?” I asked him.

He mentioned a few things that he thought about spending his money on.

“But why haven’t you?”

“Because if I buy that stuff then I will never get my DS.”

That’s the heart of saving, right there. If you buy the inexpensive stuff now, you’ll never put the pieces together to get the big thing.

“You know, Mom and I are doing the exact same thing you are. We are saving for a new house.”

He looked at me with big eyes. “Do you guys get an allowance?”

“No, Mom has her job and I have my writing business. We both get paid every so often. We take some money out of that pay and use it to save for the house we want to build. So, what you’re doing with your allowance is pretty much the same as what Mom and Dad do with the money they make at work.”

He sat there for a little bit, then asked me a great question. “Can I do some work to make some more money?”

At this point, I’m trying to devise some tasks that my five year old can pull off that’s useful to the household in some way. I can think of a lot of things that he’s just on the cusp of being able to do (washing towels, loading the dishwasher, etc.) but he still makes little mistakes at them.

Still, the lesson is there. My five year old son understands the connections between earning money, saving, and the big things in life better than many adults that I know.

How did we reach that point? Money is never a taboo topic at our house. The benefits of saving and financial responsibility are a constant topic at our kitchen table, and we as parents try as hard as we can to show good financial responsibility to the children through our own actions.

We also make an open point of every good financial practice we can think of. When I get a new item, it’s usually via a trade or through money I’ve saved. When I read a new book, it’s usually from the library or a used copy I got from somewhere or from the “free” Kindle book selections. We spend time engaged in hobbies that are low cost, like reading or playing those used board games with our friends. We make meals at home. When we have something expensive that we want, we save for it. We plan many of our shopping trips around sales and coupons. None of these factors are hidden in any way from our children. In fact, we talk about it with them quite often.

Our children seem to be absorbing these things and we couldn’t be happier about it.