It is critical to start teaching money saving skills to children at a young age. The younger kids learn these habits, the more likely they are to continue them as adults. One of the simplest ways to start is with a piggy bank. Let your child assist you in choosing or making a piggy bank. Children are more motivated to use piggy banks that they enjoy. Consider different colors, themes, sizes and shapes. Remember that a piggy bank doesn't actually have to be in the form of a pig. If a child would prefer to use a cat bank or a space ship, run with it.
Some parents might want to have two piggy banks, one for short-term savings and one for long-term savings. As many young children struggle with the concept of saving money for a long time it can be beneficial for them to have access to short-term savings as well. Instead of simply putting all of the money into the piggy bank for an unspecified amount of time use a short-term bank and set tangible rewards for those savings. You can even tape a small reminder of what your child is saving for. Maybe it's a new shiny red bike, cut out that photo and tape it to the bank to be a constant reminder.
You may also want to consider matching a child's savings, particularly to help him or her save up for more expensive items. For example, if a child wants a brand new $50 video game, offer to match the child's savings of $25. Suddenly this large goal will become more attainable. Additionally, if you have multiple kids, offer the option of putting the savings toward a single large event such as a trip to a local museum.
Many families institute rules for how much money a child should put into savings. A recommended starting point is 25 percent for short-term savings and 25 percent for long-term savings. You can adjust these percentages over time as needed. If you have different guidelines in mind, go ahead and use them. Have a family meeting and get input from kids to establish these rules before putting them into place so that everyone is on the same page.