Laying the foundation for good financial habits begins at an early age — often with a simple piggy bank. However, a team of Brock University researchers has found that when it comes to teaching specific saving and spending strategies, waiting may be worthwhile.

“Saving for a future purchase is fairly abstract for a very young child,” Professor of Psychology Caitlin Mahy says of a recently published study she supervised.

The research team, led by Psychology PhD student Ege Kamber, set out to explore how young children develop saving skills early in life through a simulation called the Saving Board Game, where preschoolers can save or spend a limited number of tokens.

The researchers conducted the study last year at the Ontario Science Centre in Toronto. They recruited 254 ethnically diverse children between the ages of three to five years and their parents to participate in the experiment.

The Saving Board Game, created in 2020 by Mahy and then PhD student Tessa Mazachowsky (BA ’14, MA ’17, PhD ’22), consists of a computer screen displaying a town with several locations to visit.

Each child was given four tokens at the start of the game. They were told they could spend their tokens on smaller stickers during the game or save three tokens for a larger, more appealing sticker they would receive at the end of the game.

The children were then assigned into one of five conditions that gave them a strategy that was expected to improve saving performance.

One of the conditions was a “control group,” where children played the game without receiving any further direction.

Children in the other four groups were given instructions that might lead them to save, including deciding beforehand how to allocate their tokens, keeping track of their spending and saving throughout the game, and trying to imagine how adults or other children might spend and save their tokens.

“Children in these strategy conditions were expected to save more than their peers because they were given instructions that help them save more,” says Kamber.

While the team found older children were better at saving overall, there were no significant differences in saving results between children in the control group and those receiving instructions in the areas of budgeting, tracking and taking the perspectives of another adult or child.

Mahy says the reason why none of the strategies were successful could be because “saving tokens rather than items is quite abstract for preschool children.”

She notes previous studies in the field involved young children successfully saving marbles in simulation games.

“A token is a representation of money, whereas marbles might be easier to save because they are the resource itself, and not a representation,” says Mahy.

She recommends that parents be patient with preschool age children when it comes to saving their money.

“It might be that three to five is just too early to try to improve young children’s saving of money, or money-like representations,” she says. “It might be better to speak with children more generally about the importance of saving and then wait until children are six or seven before trying to introduce specific strategies.”

In addition to Mahy and Kamber, the research team included Mazachowsky, Psychology master’s students Madi Maguire (BA ’23) and Edyta Houshang Tehrani (BA ’22), Kwasi Duah (BA ’23), and fourth-year Psychology student Maria Conversano.

Their findings have been published in an upcoming issue of the Journal of Experimental Child Psychology.

Supporting the research was funding from the Government of Canada’s Natural Science and Engineering Research Council of Canada (NSERC), specifically NSERC’s Undergraduate Student Research Awards (USRA) program.