Teaching children to save: What is the best strategy for lifetime savings?

•We relate adult saving to informal methods of teaching to save received when child.•The propensity to save and the amount saved rise by 16% and 30% if taught to save.•The best teaching strategy combines advice, giving pocket money and money control.•Giving pocket money only is an ineffective strategy.•The effect of parental teaching is generally persistent with age.

We study the effect of alternative parental teaching strategies on the propensity to save and the amount saved during adulthood. Using a panel dataset from the Dutch DNB Household Survey we find that parental teaching to save increases the likelihood that an adult will save by 16%, and the saving amount by about 30%. The best strategy involves a combination of different methods (giving pocket money, controlling money usage, and giving advice about saving and budgeting). The effect of parental financial socialization is persistent with age, but decays at elder age for the propensity to save.