Teaching Children to Save and Lifetime Savings : What is the Best Strategy?

While the importance of saving is widely accepted, our understanding on how to encourage people to save is still quite weak. We provide robust evidence of the effect of alternative parental teaching strategies on the propensity to save and the amount saved by their children during adulthood. Using a panel dataset from the Dutch DNB Household Survey we find that parental teaching has a significant and large effects on saving attitude. Although the best teaching strategy involves a combination of different methods (giving an allowance, controlling how children spend their money, and talking about saving and budgeting), just giving an allowance is ineffective. Individuals who received no parental teaching tend to procrastinate their savings as long as they can