Teach kids good money habits with the ‘Save, Spend, Share’ plan


Want to prepare your child(ren) for a lifetime of financial wellness? Now is the time to help them develop a healthy relationship with money. The most fundamental lessons about money are related to how we use it. In addition to earning money, we tend to save, spend, or share it. Teaching kids how their financial choices affect them (and others) will help them make smart financial choices as they grow.

While younger children won’t be able to fully understand the value of money, they can grasp basic money concepts by age 3. Research shows that by age 7, children can recognize the value of planning/budgeting and delayed gratification and understand that some of the decisions they make in spending money are permanent. Oftentimes, the money habits that kids develop by this age are carried into adulthood.

Teaching your kids how to save and budget their money at an early age helps them reinforce the good money habits that will set them up for long-term financial health and wellness. If you’re unsure where to start, LUSO recommends the Save, Spend, Share plan, which helps kids understand the fundamentals:

  • The value of money
  • Saving for the future
  • Planning and budgeting
  • Sharing with others

How does it work?

The Save, Spend, Share plan is a simplified budgeting strategy that includes three buckets (or piggy banks): one for saving, one for spending, and one for gifts/sharing with others. You can decide what percentage of each dollar earned goes into each bucket, but we recommend a plan that looks like this:

Save – 30 percent

For every $1 kids receive, save $0.30 (or 30 percent) of their funds.

Saving money teaches kids about delayed gratification, planning for future use, and the importance of goal setting. When kids set goals and track their progress with each deposit into their savings piggy bank, they will learn a valuable lesson that some things are worth waiting and saving for.

Spend – 50 percent

For every $1 kids receive, we recommend spending $0.50 (or 50 percent) of their funds.

Does your child enjoy purchasing toys with their own money? Do they have their eye on a new book or video game? Giving kids 50 percent of their money to spend gives them the satisfaction of purchasing what they want, and deciding for themselves if that’s really worth their money.

Share – 20 percent

For every $1 kids receive, share $0.20 (or 20 percent) of their funds.

Most kids are taught the importance of sharing from an early age, so this is a natural extension of those lessons. Setting aside some money to give to others (whether as a gift or as a form of charity) empowers kids to make a difference, which they’ll carry into adulthood.

What makes the Save, Spend, Share plan so effective?

It’s simple. That’s what makes this plan so effective. Many parents will notice that this kid-friendly approach to money closely mirrors the 50/30/20 rule that divides monthly income into three buckets: 50% for needs (housing/food, etc), 30% for wants (recreation), and 20% for savings and debt repayment.

The best part about these spending/savings plans for kids and adults is that they’re flexible. The Save/Spend/Share recommendations provided here can be tailored to suit your specific child while still instilling the same basic financial concepts/goals.

Ready to get started?

LUSO offers children’s savings accounts as well as an in-school banking program that gives them the opportunity to conduct their banking in person, right from school! It’s easy and fun and we’d love to include them! Visit our Student page to see if your school participates or download a banking agreement. If you have any questions, contact our member service department at (413) 589-9966.