I’m not sure when or if we will we will ever be done teaching our three children. I’m sure at some point soon when they are out of the house the learning will come in the form of advice more often than learning by example or pure lessons.
I’ve recently noticed a subtle shift as my son and daughter began to drive. They used to be a captive audience as passengers in the car as I would be driving them somewhere. A great opportunity to talk with them one-on-one which has sudden disappeared.
So just a friendly reminder to all you parent’s out there it’s never too early to start talking money or any other topic with your kids because the time does go by quickly. Some experts believe money lessons can begin as early as three years old. We did not start that early, as my wife and I just didn’t have our finances organized well enough to pass on any valuable lesson until our children were much older.
I believe we’ve made up for it in some big ways, not by any master plan, maybe just by a little luck, and a little fate mixed in. Over the last six years our children have seen us hit financial rock bottom, build a debt repayment plan, becoming debt free, incur a job loss, understand the importance of an emergency fund, see an active job search, and putting it all back together again.
Even with all that real-life experience I was a little surprise to find in my recent spending habits post of our teenagers that they were doing very little in the way of saving money. It just reinforced that as a parent your job is never done. Quickly we decide it was time to put a money-saving plan in place with our children.
Our Children’s Saving Plan
Our three children are ages seventeen, seventeen (twins) and fourteen. All three have an online bank account and debit cards. These accounts are all associated with our accounts so my wife and I can keep a close eye and help them manage their money.
Our seventeen-year-old son and daughter both have part-time jobs and their paychecks are direct deposited into their accounts each week. They both manage their accounts via apps on their phones. All of this has been set up on online or over the phone and they have never set foot in a bank branch.
The obvious omission is a saving account. We did not initially open one for them as we wanted them to experience a little freedom and manage money on their own. So far, so good, no issue to speak of, no over drafts, only few close calls with low balances. I’m talking under a dollar.
College is roughly six-months away and we’ve all agreed it’s time to save. We have recently opened saving accounts for all three children. For our youngest son with no regular income he will use the saving account when he does earn or is gifted money. For our twins, they have with my help created an automated transfer of $20 a week into their savings account.
Now a quick calculation $80 a month for 6-months or $480. Now that not a lot of money, but it’s a start. We expect that their contributions to savings will increase over time. During the summer months, they will have the opportunity to work more hours and hopefully in return save more.
The more savings that is done now will give them flexibility during their first college semester as far as they number of hours they may need to work for spending money. My hope is that over time as they see the saving balance increase they will get excited about the process and begin to save more.
Saving Tools for Parents
I think the good news for parents of children of any age is there are several saving tools that you can use to get you children hopeful excited about the process. Here are a few that come to mind.
Piggy Bank – The old standard in savings. If you really want to test your willpower, get one without the rubber gasket in the bottom.
Save, Spend, Give jars – I’ve seen a lot of DIY ideas for these jars. think of them as a great way to introduce your children to thinking about their money short-term, long-term and for others.
Piggy Box – A twist on the traditional piggy bank with the Save, Spend and Give buckets built into a box. No hammer required.
Passbook Saving Account – The old-school saving booklet that was updated at your bank when a deposit or withdrawal was made. Basically, a ledger. I had one as a kid.
Online Saving Account/App – Quickly becoming the standard for many. Deposit via ATM or mobile app and view account online. Most online account offer better interest rates than traditional branch banks.
So, as you can see there are several tools that can be used at different ages to help teach and stimulate savings. We are hopefully that our latest teaching lesson, is not too late and will provide a great foundation of saving habits for our children for years to come.
What tools have you used to teach your children about savings? At what age is appropriate to begin the money discussion with kids? Are there other money saving tools you would include?