A number of years ago, I remember reading articles about a concept called “Feed the Pig”. The idea is specifically designed to help children to develop healthy money-related habits and to learn about the benefits of saving for their future.

Fast forward to today: I was in a store picking something up and I overheard a parent telling their child, “No, you can’t get it. You chose not to save the money from packing groceries. If you want something, then I suggest saving your money to buy it.”

My first thought was, “Finally! A parent not giving into their child’s every want!” I then thought how very important it is not only to show children the importance of healthy money-related habits, but also to help them create some saving discipline.

In today’s world where instant gratification is the norm, the reality is that teaching children the importance of saving money is crucial.

Many years ago, the American Institute of CPAs created an initiative created focused on instilling financial literacy in young minds. This campaign – called “Feed the Pig” – featured a fun piggy bank mascot to represent the principles of saving and financial wellness.

The Feed the Pig concept has ten key takeaways I think it is important to share. I am sure these will resonate with many families that have children.

Introduce the concept of money

Before children can understand the nuances of savings, they need to grasp what money is and how it works. Start by explaining the different denominations of currency and their values. Use real coins and bills for hands-on experience. Play games where children can “buy” items using play money. This will help them to connect the concept of spending with the notion of value.

Set savings goals

Once children understand what money is, help them set achievable savings goals. Identifying what they want to save for – whether it’s a new toy, a book or an outing – gives them something to work towards. Encourage children to dream big, but also to create short-term goals. For example, if they want to save for a bike that costs $400, break the savings down into smaller milestones (for example, putting away $10 a week).

Create a savings chart

Visualisation helps children recognise their progress and builds anticipation for reaching their goals. Create a colourful savings chart together to track their deposits so they can watch as their savings grow over time. Use stickers or stamps to mark each addition to their savings. This reward system can make the process engaging to reinforce the habit of saving.

Introduce a piggy bank

The classic piggy bank is the perfect symbol of saving, and it provides children with a tangible means of managing their money. Consider using a transparent piggy bank so that children can literally watch their savings grow. This visual element adds excitement and motivation as they see each coin or bill as a concrete step towards their goals. Encourage them to personalise their piggy bank with colours, stickers or drawings to make it uniquely theirs.

Teach the importance of budgeting

Teaching children how to create a basic budget is an excellent way to illustrate the need to balance income and expenses. Guide them in setting aside savings for specific goals while also planning for occasional treats or entertainment. Encourage their involvement in household budget discussions to reinforce the concept that adults also have to make decisions about saving and spending.

Encourage smart spending

Although saving is essential, teaching children how to spend wisely is just as important. Talk to them about the difference between needs and wants, helping them to discern what is essential versus what they can postpone. For example, if they want a new video game but haven’t yet finished their homework, encourage them to consider whether to use their savings for the game now or hold off so they can use the money for something they might want even more later.

Provide real-world experience

Give children opportunities to earn, fostering an understanding of both hard work and the value of money. Chores, lemonade stands or mini-business ventures can instil a sense of responsibility and teach them the rewards that come with saving what they earn. The more they work for their money, the more they will appreciate saving it.

Share stories about money management

Incorporate storytelling into financial lessons. Children are captivated by stories, so using relatable characters who make both wise and unwise financial choices can create meaningful learning experiences. Use children’s books that focus on financial literacy to spark their imagination and reinforce these concepts through engaging narratives.

Be a role model

Children learn a great deal by observing adult behaviour, thus it is important to be a positive role model when it comes to savings and money management. Share your savings goals, discuss how you budget and include children in age-appropriate conversations about financial decisions. Demonstrating responsible money habits will encourage them to adopt similar behaviours.

Use technology

In today’s digital era, technology can be a valuable tool for teaching children about saving. Many apps are designed specifically for children: they gamify money management and the process of saving to make them more engaging for young audiences. Seek out programmes that help children visualise their savings and learn about budgeting in a fun and interactive way.

The Feed the Pig campaign’s principles highlight the importance of instilling financial literacy early on. By using the tips outlined above, parents can teach children the value of saving in an enjoyable and engaging manner.

The path to financial independence starts with understanding the importance of saving, which can help achieve immediate goals and lead to long-term financial stability. By ‘feeding the pig’, children will enhance their financial awareness and skills, preparing them for a financially savvy future.

• Carla Seely has 25 years of experience in international financial services, wealth management and insurance. Over the course of her career, she has obtained several investment licenses through the Canadian Securities Institute. She holds the ACSI certification through the Chartered Institute for Securities and Investments (UK), the QAFP designation through FP Canada, and the AINS designation through The Institutes. She also holds a master’s degree in business and management