A few months ago I began saving money for Brady using a simple “five-dollar rule.” When my husband Guy and I married, we set up a small automatic transfer into a separate savings account specifically for our future children. That account is dedicated to college, but there are many other expenses ahead—his first car, trips, camps, braces—so we needed an additional, flexible way to save. That’s where the $5 rule comes in.
The rule is simple: every time you get a $5 bill, put it away. I keep a small envelope in the planner in my purse for these bills. If the money stays in my wallet it’s too tempting to spend, and even an envelope in the purse can disappear into everyday expenses. Folding the bills and placing them in Brady’s piggy bank keeps the money out of sight and out of mind until we can deposit it.
The important part is getting the cash into his piggy bank as soon as possible. Money in a wallet is likely to be spent; money left loose in a bag might be used for small purchases. But once it’s in a child’s piggy bank, I’m much less likely to break it open. That makes the system surprisingly effective for accumulating small bills over time.
The method is flexible and low-effort, and it builds a habit of saving without requiring a strict budget. Over months, those $5 bills add up—especially when you make a point of putting every one aside. It’s also a simple way to involve kids later on, showing them how small, consistent actions grow into meaningful savings.
Of course, if we have another child, we’ll need to decide whether to split the money between children or start a new jar for the next baby. Either approach can work: a single shared fund can be divided later based on need, while separate containers make tracking easier from the start. Another option is to keep using the $5 rule for small cash savings while continuing larger, designated accounts for long-term goals like college.
There are many ways to save for a child’s future. Automatic transfers to dedicated accounts cover major expenses, while a small, consistent habit like the $5 rule helps build additional savings for irregular costs—lessons, activities, or unexpected needs. The key is finding a system that fits your routine and helps you resist the temptation to spend those small bills.
How are you saving for your children’s future expenses? Do you use a simple cash rule, dedicated accounts, or a combination of strategies?