Teach your kids how to handle money and encourage them to by setting up a small fund in a similar system as a 401k retirement plan.

This works best with older kids who get regular allowances. Make sure that your kid also has his or her own bank account so that they simulate what adults do.

Sit down with your kid and work on a realistic goal. It can be a certain amount of money that he or she should come up in her savings account after a a few months or a year, depending on the goal. Or this can be a material thing such as a cellphone or some other electronic gadget.

The idea here is to match what they can save. You can come up with a a percentage so that you can also manage your own budget. However, you can start with a dollar for a dollar.

Check their progress every month. Seeing their savings grow would encourage your children to save more. However, let them withdraw money whenever they decide. If they take money out of their savings for other things aside from their goal, you can work out a penalty or a “fee” for that, as an adult would if he makes an early withdrawal from his savings or fund.