How to teach a child to save for something they want

Your child spots a Lego set in the shop and wants it now. Their pocket money covers about a quarter of it. This is where the most useful money lesson begins. Putting something aside today to get more later is hard even for adults, and children can start learning it early.

The one-sentence answer

Why waiting is so hard

For many years the psychologist Walter Mischel ran studies at the Bing Nursery School at Stanford University. Each child was given a choice. They could eat one marshmallow straight away, or wait for the grown-up to come back and get two.

The most interesting part was how the children waited. The ones who managed it turned away from the treat, covered their eyes with their hands, sang to themselves or made up games. Some whispered the rule to themselves. Mischel concluded that it was less about willpower and more about where a child puts their attention. Those who stared at the marshmallow gave in sooner.

Older children found an even cleverer trick. They pictured the marshmallow not as something tasty but as a plain white puff, like a cloud or a ball of cotton wool. The treat was still there, but it pulled at them less.

Patience is not destiny

For a long time the marshmallow test was treated almost as a forecast of success in life. In 2018, the researchers Tyler Watts, Greg Duncan and Haonan Quan tested that link with 918 children from a much wider range of families. The link between how long a four-year-old waited and how they were doing at fifteen turned out weaker than in the original studies. Once the researchers took family income and home life into account, it shrank by a further two-thirds.

Mischel himself said a child's future is not decided by a single marshmallow. Waiting can be learnt, and the first practice is ordinary and happens at home.

The US Consumer Financial Protection Bureau (CFPB) says much the same. The ability to plan ahead and put off a reward starts to develop in the preschool years. Money habits are mostly formed between the ages of six and twelve.

How to save for a goal together

1. Make the goal specific. Not "something nice" but a football, a book or a paint set. Your child can draw the goal or stick a photo of it on.
2. Give the goal its own jar or box. The University of Minnesota suggests three labelled containers. One for spending, one for saving and one for sharing with others. A drawing on the jar is a reminder of what the money is for.
3. Start with a goal that is close. For a younger child a week of waiting is already a long road. A big dream can be split into a few small steps.
4. Count together. Once a week, tip out the coins and count how much is there and how much is still missing. That way your child can see the goal getting nearer.
5. Share ways to wait. The same ones the Stanford children used. Keep the jar out of sight, skip the daily trip past the shop window, think about something else.
6. Let them get it wrong. If your child spends their savings on something small and then regrets it, that is a lesson too. Talk about what they will do next time.

Children wait longer when grown-ups keep their word

In 2012 Celeste Kidd and her colleagues at the University of Rochester repeated the marshmallow test with one twist. Before the test, a grown-up promised 28 children aged three to five some better crayons and stickers. For half of the children the promise was kept, and for the other half it was not.

The difference was large. Children whose grown-up kept their word waited about twelve minutes on average. Those who had been let down waited about three. Nine of the fourteen children in the first group held out for the full fifteen minutes, and only one in the second. The researchers point out that the group was small. But the message is clear. Waiting makes sense when you believe the promised thing will really come.

So if you have agreed to add ten pence for every fifty your child saves, or to buy the goal as soon as the full amount is there, do it on time. For a child that is proof that patience pays off.