Teach Your Kids About Saving Money-Bank On It

Be financially responsible so you can pass it on to your kids

We had a garage sale in our neighborhood, and my kids had their Kool-Aid and coffee stand. The agreement: Whatever amount they earned, money was to be split between them, and think about what they wanted to do with it.

Kids these days can only think of two things: Video games and candy. So I added to all these suggestions-that could avoid a warning from their dentist-to put it in the bank and save it. As expected, they were really weary with this idea. “Cash on-hand and I have to get rid of it?” ”Wait-what?  I can’t spend it?” Well yes they can, but smart talk from Mom and Dad can work wonders.

I decided that the best way to approach this is to show them how it works-so I took them to the bank to show them how, how much money I have in the bank and that I don’t have in my mind a wish to spend it on anything.

So here’s what I did:

• My husband and I told them (after games and candy with greedy faces popped on their faces) “Or, we can just put it in the bank!”  Greedy faces turned into sad faces. Give it time, the seed is planted. Patience is key.
• Bring it up some days later-tell them that you have money put away in a bank; that some people do this to save money for something they can’t afford (or a toy they can’t buy with the money earned) and give specific examples. Most banks have kids’ saving accounts that reward them when they deposit money in their account. Check your bank for more information.
• Couple of days later, ask them again-Are they game? Reinforce the knowledge that saving money is good, is great, and that someday they may need it on something more important. Scratch off the toys and candies at this point. Now we’re getting into serious business. Still, one of my kids was interested in opening a new bank account while my other kid didn’t seem that interested.
•  

  I went to the bank and asked them what are the requirements and information needed to open their bank accounts. I did that the day I took them to the bank and showed them around. They were as wowed as if they went to the Smithsonian. They looked at the brochures as if they were travel maps, or park attraction advertising. My bank’s local branch is a brand-new building and doesn’t look like your average bank at all. I showed them the deposit slip, and filled it out with my cash at hand.

• Both looked on as I deposited my money and I got my receipt. They were astonished at the amount I have saved (not much, but impressive for any kid) and jaws dropped. So “that’s it, that’s how it works!” I said with a lot of enthusiasm as we drove away.

Fill it up, don't break it!

I waited a day or two and surely, one of them asked when we were gonna go back to the bank and open their accounts. Great! I took again the time to talk to them about how important this step is for them, and that the more money they put in the bank it was “less money to deal with.”

I told them that what Mom and Dad do is that we don’t see the money. We know it’s there at the bank, so they don’t have to worry about piggy banks that much, or stealing if your kids are like my kids and fight for it. I intervened one time and I was as menacing and stern as Judge Judy.

I am happy to report today that both my kids were very excited to have their own bank accounts!  One of them just deposited what’s required, which is $5; the other one, more than $40.

The next step is, if they don’t have it ingrained already: Hard work ethics. Ways to earn money. Responsibility and importance of what cash they have on hand. 

Flexibility is key, and give them enough room to let them make their own decisions but keep a close eye on them. It is a great accomplishment for a parent to know that asides from raising a good kid, it’s that this child will turn into an adult that will be money savvy when it comes to money and financial decisions.

Related articles

• Use a Savings Account as a Teaching Tool for Your Kids (visualeconomics.com)
• Savings Account: Tool for Teaching Kids about Money (visualeconomics.com)
• How to Teach Your Children to Save Money (cash-bandit.com)
• Teach Your Children About Money. (billshrink.com)
• ING Direct Offers Kids Savings Account (bargaineering.com)
• Savings Account: What is getting in the Way of Interest Rates (visualeconomics.com)
• Kids and Money: Teaching Toddlers (bargaineering.com)
• More Reasons Your Savings Account Rate Stinks (visualeconomics.com)
• 7 Ways to Teach Financial Responsibility to Children (theraleighmortgageguy.com)
• Tips for a Great Garage Sale (blogher.com)