Ideally soon after a child is born the parents should start a savings account for him or her. But if you wait until the child is older you can use the savings account as a life lesson. I bet every kid who has gone through Day Care or a Sunday School class has planted some seeds in some dirt in a little disposable cup and watched the seeds struggle to push the dirt out of their way to pop up and grow into a flower or a vegetable plant.
If anyone is teaching their kids about the seeds of life right now, don’t stop there!! Take them to the bank the next time the bank is open and start a savings account. Tell the child that just like those little seeds can grow into something bigger and more useful so can their money. They may be too young to understand compound interest. But just like water and sunshine made the seeds grow over time, interest and frequent deposits will make their savings account grow.
If you get feedback like, “But I want to keep putting my money in my piggy bank.” Explain that after a while the piggy bank will get too full and get a belly ache if they don’t put their money in the bank. And explain that the piggy bank can’t help turn their quarters into dollar bills, but over time the bank can do exactly that for their money. Or in this economy in 2010, maybe you better explain that the bank can turn 4 pennies into a nickel.
That first Christmas as a parent can be hard on the family budget. We are so excited to be Mommies and Daddies for the first time that some us run to Toys R Us or Wal-Mart and drop a small fortune on toy after toy to make Christmas morning extra special. Then after all the wrapping paper is picked up and thrown away, buyer’s remorse sets in. Not only did we make the credit cards melt with all that buying, but the kid (most less than a year old unless they were born on Christmas the year before) enjoyed the paper and boxes a whole lot more than the extravagant toys that were nestled inside.
Save yourself a lot of heart ache and financial woes, and open a savings account for your little one by at least that first Christmas. When the urge to buy a $20 or $50 toy pops in your mind, DON’T!!!!! Drive straight the bank and make a deposit in Junior’s savings account. Buy the time he or she is old enough to head off to college that money may grow into enough to buy a textbook or a tank of gas to come home and see you on the weekends.
Now, let me go practice what I preach and drive by the bank and make a deposit. If any of you have savings tips to share please send them to me at email@example.com.