National Teach Children to Save Day occurs in April each year. News 3 asked our financial resource Carl Carlson to talk about what this is all about, and he said the day was started by the American Bankers Association in 1997 to help children learn the habit of budgeting and saving money at an early age. This is so that when they head out into the world they avoid pitfalls that can be financially devastating.
The day is a yearly reminder to be teaching and instilling the habit of saving money into the lives of our children. Our educational system does very little to help educate our children on money management, so as parents and grandparents we need to continually be talking about the financial decisions we are making and why we are making them, Carlson said.
The American Bankers Association says we should do things like:
1. Give each child a bank. It helps if the bank is clear so they can see their savings grow.
2. Open a savings account. They can monitor their account and watch it grow there, too. However, given today’s low, low interest rates on savings accounts, they won’t see their money grow much at all, so Carlson would suggest taking the extra step of opening them an investment account and buying a few stocks of companies that they use the products of, maybe like Apple stock if they are using a cellphone or an iPad, etc.
3. Show them what things costs. When they want a new toy, direct them to their savings. Ask them to consider whether to toy is worth the amount they want to spend. If they still want to purchase the item, have the child pay. The act of paying with their own money will demonstrate to them the cost of the toy.
4. Demonstrate need versus want. Explain how our food, clothing, and shelter are necessities. However, we can live without going out to eat or buying a new television or the latest phone. Place the needs before the wants even in your daily shopping.