Children who learn to save from an early age can get a great head start for later life but teaching and encouraging them to save is not easy. With no real concept of the actual value of money, children tend to want that must-have and, often, expensive toy right now, particularly if their friends already have it.

In a time where children are exposed to powerful advertising aimed directly at them, an impromptu lesson on saving in the aisles of your local toyshop will only lead to tears and tantrums. So how can you instil the value of saving in your children?
Here are our top tips to avoid falling prey to the sales-hungry advertisers and minimising those toyshop temper tantrums…

Start at an early age

As soon as your children have an awareness of exchanging money for items that they want, this is the time to begin cultivating the young saver in them. Remember that children tend to live in the "now" and can't identify with far-reaching goals. With that in mind, encouraging them to start putting money away for university will be met with results akin to nailing jelly to a wall. What you need to do instead is aim for a short-term goal using visual/physical aids.

The Piggy Bank

Ok, so long gone are the days of collecting the family of Natwest Piggy Banks – remember those? Same idea but using something that your modern children like, whether it's Ben 10 or Peppa Pig, it should be a modern day piggy bank that they can relate to. If they're saving for a particular toy then why not theme the piggy bank around that? You don't have to go out and buy one – save yourself some money by making one at home with your children. They will enjoy using something more if they have helped to make it.

Match their Savings

By matching your child's savings (e.g. for every £2 they put in, you add £1) you will help them to see their savings building more quickly. It will also help to reinforce the value of saving by rewarding them for doing so. Putting up a picture of what they are saving for next to their savings will also help them to stay focused on achieving that goal.

Another valuable lesson that will help children understand the value of money is knowing where it comes from. To achieve this you could make a chart with stickers on – your children can earn stickers through good behaviour such as helping with tasks such as tidying away their toys. When they get a certain number of stickers you can put some money in to their piggy bank. A reward system like this should be simple, creative and most importantly, fun for you and your children.

Your Child's First Bank Account

Once your children are old enough to open their first bank account it can be difficult for them to relate to saving when they can't see the actual pennies accumulate. This is when you have to teach them how banks work. In some cases banks will help you to do this by offering accounts specifically tailored to young children. They may be themed so that your children can relate to them, will offer incentives for opening the account and can provide information that will help you to explain how they work to your children. As a visual aid you could even take your child to the bank so they can see where their money is or try to show them their money online.

Make Interest Rewarding

Just as you did when they were younger, you can still make a plan to contribute to their savings. With interest rates as low as they are, it's difficult for anyone to see their savings grow, particularly children. Try discussing what portion of their pocket money/allowance should be put into their account. Discourage them from putting in less but reward them for putting in more by making a contribution. When it comes to birthdays and Christmas, why not suggest to your children that family put money into their account rather than giving it directly to them. Alternatively, rather than buying them that iPod, give them money towards it (whatever you can afford) so that they can make use of their account by putting the rest towards it or saving until they have enough – a contribution like that will surely boost them towards their goal.

Using these tips from an early age, by the time your children hit adulthood they should be well on their way to hitting the current ISA allowance of up to £11,280 per year or, alternatively, they may have saved enough to see them through university so you won't have to!

Guest article by Moneysupermarket.com