Ok, at first I know this won’t sound like you are saving money, but it is the principle that you teach your children…once they get into the habit, then you’ll save money.  Here’s what we did:

Our electric and water bills were higher than we would like, so we told the children how much they were and that next month when we got the bill, if it was lower we would do something special (I can’t remember now what it was…)  They all got on the bandwagon of turning off lights, unplugging items not in use, etc. Taking shorter showers, not letting the water run while they brushed their teeth, etc. became the norm. We spent the "savings" on something fun with the children and had a great time. 

After the first couple of months, we told them we would give them the difference in the last bill and the present bill. So if our electric bill was $250 and they brought it down to $200 we’d give them $50 to split.  That was a real incentive. After so many months of this you can switch to a new challenge and pocket the "savings" since by then, they will have grown accustomed to turning off switches, water faucets, etc.

This really made a difference in how much electricity and water we used. The children now have a saving mindset, that hopefully will last a lifetime.