Saving MoneyMost of us grew up putting birthday money and spare change into a piggy bank on a high shelf in our bedrooms, that we weren’t allowed to touch. We were saving for a rainy day, a future date and an unknown goal. A newer and more realistic approach to teach children savings is to have three banks for three specific types of savings. The idea behind this is to teach kids that only a small portion of their money can go to what they want and more of their money will go to necessities.  This way of saving is more in line with how a child’s money will be spent as adults.

The three banks you create are labeled “Wants”, “Needs” and “Give”. Every time he or she gets birthday money or paid for chores 20% is immediately separated, split in half and put into the “Want” and “Give” banks while the remaining money, the 80% goes into “Needs”. As this becomes a regular habit so will the idea of what wants and needs really are. If they are emptying their wants bank all the time for candy then they will never have enough for a new bike. They learn that they can’t take from needs because that is designated for college or a house. Money that goes into the giving bank can never be touched because it no longer belongs to them. It is for the cause that they chose to begin their lifetime of Philanthropy. This method of savings helps them prepare for life as an adult in the real world when wants, like flat screen TV, need to be saved for while needs like rent and utilities have to be paid.  As the child becomes older and more responsible the money can be put into actual savings accounts at the bank where it can earn interest and the child receives a statement and watches it grow.

Saving as a family can be fun and educational. Find the biggest container you can use to save change and keep it in a central location. Every time someone finds change in their pocket add it to the container and see how fast it gets full.  As a family you can decide what goal to put that money towards. A garden, a trip or deposit it and start over!