According to synchronybank.com, Americans in their 30s will have accrued an average of $45K for their retirement. While it’s a great start, consider that the suggested retirement savings should comprise 1-2 times their annual salary. That recommended savings goes up for people in their 40’s and 50’s (3-4 times and 6-7 times respectively.)
Teaching a child to save for retirement may seem like a grim family activity, or something so far off it’s not worth dealing with. But money mentor Miata Edoga says it’s never too early to teach financial literacy.
“As parents, we have a real opportunity to talk about money and saving with our children,” she tells Parentology. “Whether your child is saving for his retirement or a favorite toy, it’s important to set up the foundation for a healthy relationship with money.”
Start Early

Edoga encourages money talk as early as you feel they can understand it. “Establishing the relationship between work and money is essential,” she says. “For children and for parents.”
What does that mean? A T. Rowe Price study found that 66% of parents are reluctant to talk to their kids about money. If we expect our children to have a healthy, open and honest dialogue about their finances — including the struggles — we have to start facing our own demons.
“If money wasn’t something you ever ‘talked about’ or felt good about, it can feel challenging at first to have a positive dialogue with your kids,” Edoga shares. Still, starting early — and honestly — will set your children up for success, and big-time savings.
Save by Example
Your kids will watch what you do before you even have a conversation about spending. If you have a frivolous relationship with money, chances are they will too. “All kids ‘want’ stuff,” says Edoga. “Even if they want something they see in a store, it’s an opportunity to talk about impulse buying versus saving for long-term goals.”
Saving by example also means reframing the language you use to describe a financial transaction. “Try moving away from using terminology such as ‘allowance’,” she says. “It establishes the idea that money just appears as if by magic. Help your children understand they’re not getting a handout, they have to earn it. Instead, you can use the term ‘commission’ to describe the money they get in exchange for the work they do.”
Include your children in your own investing plans. Show them your portfolio, or talk about basic types of retirement savings (such as low-cost index funds and a Roth IRA). If your child is old enough, there are simple books on investing and planning for a strong financial future, that you can read and discuss as a family.
Save, Give Spend

For young children, Edoga suggests labeling three jars: Save, Give and Spend. The purpose? “It’s an early methodology to start teaching the basic principles of long-term saving,” she suggests. “Clear jars provide a visible, physical accounting of their money.”
Give: Just as important as saving, the idea of giving teaches children about philanthropy early on. “It’s important that they know how to give back,” says Edoga. “Once the Give jar is full, you can talk about which charity or cause to give it to. You can even make it a different one every time,” she says.
Save: This jar teaches them about early saving. Once the jar is full, you can transfer the contents to a higher interest money market account where funds can build until you’ve made decisions about particular investment vehicles.
Spend: As the title suggests, these funds are used for “stuff,” whether it be impulse buys or a big-ticket item. “Be sure to remind your child that once their spend jar money is gone, that’s it,” Edoga recommends. “It will certainly give them pause. ‘Do I really want this? Or am I saving for something bigger?’”
By having early conversations about saving for retirement, you not only lead by example, you empower your children to secure their financial future. “Saving boosts confidence, will power and responsibility,” Edoga enthuses. “It also ensures they won’t live at home with you forever.”
Save for a Child’s Retirement — Sources
Dave Ramsey — Teaching Kids to Save for Retirement
Dave Ramsey — How to Teach Kids About Money
Dave Ramsey — Raising Money Smart Kids