How to Teach Your Kids to Save Money for Emergencies


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Photo: Greenlight

Most parents know a thing or two about saving money for emergencies. But with our kids, it may be hard for them to understand why we need to save for a rainy day. Right now we’re all spending a lot of time at home. Some of us are watching the news and some are answering tough questions about current events. Either way, we have a special opportunity to share the importance of saving for emergencies with our kids in a way that makes sense to them.

Put it in their world. The current economic climate provides a real-world example that can serve as a lesson-teacher for your kids. If they’re old enough, share how you or members of your community may be affected by losing work. Talk about how emergency savings can help them through tough times.

1. Set a budget. Saving isn’t always easy, especially when you have needs and wants that take up your monthly budget. Help your kids understand how to budget by putting a limit on when and where they can spend. For some families, kids can only use their money for gas. For others, they can spend anywhere. Setting a budget helps your kids get in the mindset of allocating their earnings and putting must-haves before nice-to-haves.

2. Make it visual. Kids learn by doing. As you show your kids that it’s important to save, also show them how. Work together to set savings goals or talk to them about a big-ticket item you’ve needed to save for. With the Greenlight app, kids can set their own goals and watch their progress bar advance as their savings grow.

3. Incentivize saving. Kids are more excited to save money when they have an incentive. Encourage them to continue putting money away for emergencies by matching them or setting your own interest rate for them. Greenlight parents are able to set a parent-paid interest rate so that saving more means earning more.

4. Monitor balances. Show your kids the importance of checking their balances. While it may not directly impact their emergency funds, this helps them form the habit of closely monitoring their spending so they can live within their means.

When we teach our kids about money at a young age, they’re able to form smart habits for life. The next time you run out of stay-at-home activities to keep the family busy, take some time to work with your kids on managing their money—it pays off in the long run.


Denise Daniels,RN, MS and creator of the groundbreaking children’s brand The Moodsters is a Peabody award-winning journalist, author, and parenting and child-development expert dedicated to putting young children on the path to positive mental health. She created The Moodsters—five quirky little feelings detectives who solve the mysteries of emotions. 

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