One of the most powerful lessons you can teach your children is the value of money, and it doesn’t have to be complicated. Introducing an allowance is a simple, effective way to help kids practice budgeting, saving, and making thoughtful spending choices. Kids’ Bank at Piscataqua Savings Bank supports those early lessons by giving Seacoast families a hands-on place to put allowance money to work, with age-appropriate accounts and resources designed to grow with your child.
With a little guidance, kids can develop lifelong money habits that set them up for financial success.
Start Early, Start Simple
You don’t have to wait until your child is a teen to start teaching money management. Even younger children can grasp the basics of earning, saving, and spending with small, consistent allowances. Begin by explaining what money is used for (groceries, bills, fun activities on the Seacoast) and why it’s important to make choices about how to use it.
When starting an allowance, consider tying it to small chores or responsibilities appropriate for their age. This helps children associate effort with earning and sets the stage for understanding the value of work. For younger kids, it might be as simple as putting away toys or helping set the table. Older kids can take on more responsibility, such as assisting with household tasks or managing small projects.
Budgeting Basics: Divide, Decide, and Designate
An allowance is most effective when paired with a simple budgeting framework. One popular approach is to divide money into three categories: saving, spending, and sharing.
- Saving: Encourage your child to put a portion of their allowance into savings at PSB Kids’ Bank. Even small amounts can grow over time and help them learn the value of waiting for something they really want.
- Spending: Let your child have a say in how they use part of their allowance. Whether it’s a toy, a treat, or a fun activity, making their own choices helps them learn responsibility and think about what really matters to them.
- Sharing: Encourage your child to set aside a little for giving. It can be as simple as helping a charity on the Seacoast or someone in need, teaching empathy and showing that money can make a positive difference beyond just buying things for themselves.
This system doesn’t have to be complicated, just start simple and adjust as your child grows. Even young children can understand percentages or use visual jars to see where their money goes.
Turning Saving Into a Habit
One of the best ways to make saving stick is to make it real. Kids are naturally motivated when they can see their money grow over time, and a children’s savings account is a perfect way to do that. PSB’s Kids’ Bank program in Portsmouth, NH is designed just for this, offering age-appropriate accounts and resources for children from toddlers to teens.
For the littlest savers (ages 0–8), the Explorers account introduces basic money concepts: what coins and bills are, why saving matters, and the excitement of watching birthday or holiday money add up. Kids can even enjoy visits with the friendly banking bear, B.A. Saver, at our branch in Portsmouth, NH, making learning about money fun and interactive.
As children grow (ages 9–13), the Voyagers account helps them start setting short- and long-term goals, take more control over spending decisions, and see firsthand how their savings can grow with fun challenges along the way.
For teens (ages 14–18), Kids’ Bank offers both savings and checking accounts, helping young adults navigate real-world financial tools like debit cards, direct deposits, and online transfers, all while parents can continue to provide guidance. Older kids can even explore opportunities like a five-year Kids’ Bank CD to learn the basics of investing.
With Kids’ Bank in Portsmouth, NH, your child not only has a safe place to store money, but also access to resources, tools, and guidance that make saving tangible and exciting. Making saving an active choice helps children understand the value of money and sets them up with healthy financial habits for the future.
Teaching Responsible Spending
While saving is important, learning to spend wisely is just as critical. Allowances provide a safe environment for kids to make spending mistakes, and learn from them without major consequences. Encourage thoughtful decision-making by asking questions like: “Do you really want this now, or would you rather save for something bigger later?”
For older children, you can introduce concepts like comparison shopping, budgeting for multiple expenses, and even tracking their purchases. This empowers kids to make informed financial choices and understand the trade-offs involved in spending.
Making It Fun and Interactive
Financial education doesn’t have to be dry. Gamifying allowance management or creating visual trackers can make money lessons engaging. Rewarding milestones, like saving a certain amount or making a thoughtful purchase, reinforces positive behaviors. Family discussions around money, such as planning a budget for a small outing on the Seacoast, can also be an enjoyable learning experience.
Consistency is Key
The real value of an allowance lies in consistency. Establish a regular schedule, weekly, biweekly, or monthly, so children know what to expect. Use allowance as a teaching tool rather than simply a handout. Over time, children will internalize important money concepts, from delayed gratification to thoughtful decision-making.
A Lifelong Foundation
Allowances aren’t just about spending money, they’re about preparing kids for the financial realities of life. By giving children the opportunity to earn, save, and spend thoughtfully, you’re equipping them with skills they’ll use for years to come. Tools like Piscataqua Savings Bank Kids’ Bank make this process easier and more structured, offering a safe place to save while providing guidance on key financial habits.
Starting early with allowances, clear budgeting, and intentional saving can turn everyday pocket money into a powerful lesson in responsibility. Whether it’s saving for a favorite toy or learning to make smart spending choices, children gain confidence, independence, and financial literacy that will benefit them throughout their lives.
Ready to get started? Stop by the Kids’ Bank teller desk at 15 Pleasant Street in Portsmouth, NH to get started today and watch your child’s savings grow!
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