It’s never too early to teach kids about money. Lesson one – you have to work to earn it! And you’ve gotta save some of it if you want to buy yourself or someone a present.
Last week, Rockville Bank hosted a “Rocky Raccoon Teach Kids to Save” event at several of its branches in north central Connecticut. The event featured activities to help children understand the trade-off between savings and consumption, and provided tips on how to invest money and see it grow.
“Teach the difference between wants and needs in terms they can understand. For example, when your child receives or earns money, talk about the rewards in saving money to purchase something big he or she really wants, versus the immediate gratification of purchasing materialistic items now,” Beth Czeremcha, Assistant Vice President/Training Officer at Rockville Bank, said.
She offered tips to Patch readers on how to motivate kids, grandkids, nieces and nephews to save.
“Find opportunities to have ‘teachable moments’ and show your child that you practice good savings habits. There are opportunities everyday to talk about money and saving,” she said. “Bring them to a bank with you, explain how you are depositing your money until you need it. Show them how to fill out a deposit slip and bring it to the teller.”
Three-year-old Anushree Sabade of Manchester has had a piggy bank in her room for the last eight months.
“If she does something well, like do a dance or make a drawing, I give her 25 cents or so which she drops in her bank. I have told her that when the piggy is full, she can buy herself a toy. She is very excited,” Anjali Sabade, Anushree’s mother, said. “I think it’s important to teach children the concept of earning a reward.”
There are plenty of storybooks that explore the concept of money. You could take a look at one of these:
- Rock, Brock and the Savings Shock by Sheila Bair
- The Kids’ Money Book: Earning, Saving, Spending, Investing, Donating by Jamie Kyle McGillian
- One Cent, Two Cents, Old Cent, New Cent: All About Money by Bonnie Worth
Teaching the concept of compound interest to older kids can be a fun exercise. You could calculate together and find out how your child’s income from summer jobs, for example, could grow over the years to several thousand dollars in a Roth IRA.
The first step, of course, is to encourage kids to open a savings account at a bank.
At Rockville Bank, kids receive their own passbook when they open a Rocky Kidsave account. Upon saving their first $50, they get a Rocky Raccoon hand puppet. The bank sends Rocky newsletters, which include features about money matters and safety tips written specifically for children. Each deposit holder receives a birthday card from Rocky Raccoon.
Alan Skinner, Customer Service Representative at First Niagara in Manchester, encouraged youngsters to open a Youth Savings account.
“It’s free for kids under 18. There’s no minimum balance requirements and if you have a minimum balance of $10, you earn interest,” he said.
For those who prefer to bank online, ING Direct’s Kids Savings Account has no fees and no minimum balance requirements.