My 6-year-old daughter loves her sparkly piggy bank, but she loves searching for abandoned coins even more. She has no qualms about picking up pennies from germ-ridden floors.
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Her concept of money is still pretty shaky, but that doesn’t stop her from regularly dumping out her $18.60 in coins to count and admire.
My husband and I know it’s time to develop a savings “system” with our daughter, but where do we start? From elementary schoolers straight through the teenage years, I spoke with a few savers and their parents for a peek at what other families are doing:
Coco, 6, Chichester, NY
Coco's accomplishments: After saving up change and the money she’s been given for birthdays and holidays, Coco has managed to save a whopping $2,400!
How she "does" money: Like my daughter, Coco collects all the loose change she finds and keeps it in her piggy bank, which she hand-painted at age 3. Last January, the family decided it was time to open an official account in Coco’s name. They paid a visit to their local bank and Coco laid out her plastic baggies filled with change on the wooden desk. She and her parents have agreed that her savings are for college, although Coco currently insists she won’t go away for school because she wants to stay with her mommy.
“We'll see how long it will last!” says Yuki.
Vivian, 7, Bethesda, MD
Vivian's accomplishments: Vivian saves her allowance in three buckets, for saving, spending and charity. Because she has been diligently stashing funds away, she has been able to buy fun things for herself, like doll accessories, hair ribbons, charm bracelets—all from her own money. Recently, she contributed her own money toward her little brother's birthday gift.
How she "does" money: Vivian started getting an allowance when she was 5, with a dollar for every year in her age. So, as a 7-year-old, she receives $7 a week. Vivian’s allowance isn’t tied to chores. Her mom Susan says: “I don't want my kids to ask how much I'm going to pay if I ask them to do a chore that is not on their standard list.”
Susan hopes this system will teach Vivian how to manage her finances. “It seems like a lot of money each week,” she says, “but she will be responsible for paying for more and more stuff, even stuff that I probably would have spent on her anyway.”
Clark, 10, Chevy Chase, MD
Clark's accomplishments: “I save for whatever I want to buy,” says Clark, a Lego-loving 10-year-old. With over 30 sets, his room is getting close to capacity. But he’s not done. “I’m saving for the Lego Museum, which is $59,” he says.
How he "does" money: Clark has been saving money from birthdays, holidays and chores since he was 6. (He helps his parents with vacuuming, cleaning his room, setting the table and making his bed.) Clark divides his money between his wallet, a plastic mini safe and a piggy bank. “Every week or so I count my money,” he says. With $26 saved, he needs another $33 before he can buy the coveted Lego Museum. “That’s a lot of chores!” Clark says.
Russell, 13, Alexandria, VA
Russell's accomplishments: Not only did he open his first bank account when he was 6 years old, but he is also proficient in the concepts behind banking, like how to save wisely, how to calculate the interest he's earning and even which kinds of bank accounts are best.
How he "does" money: Like Vivian, Russell divides his allowance ($15 a week) into thirds: savings, charity donations and spending. Russell was really into tracking his account when it was earning interest, but he hasn’t been impressed lately, as interest rates have been so low. All told, Russell has managed to accumulate about $1,700 in the bank ($1,000 is in a CD that gets slightly more interest).
An avid sportsman, he is saving for either a snowboard or a tennis racquet.
Joseph, 14, Lindenhurst, NY
Joseph's accomplishments: In addition to saving all of his birthday and holiday money, Joseph is such a voracious saver that he's even figured out a crafty technique to add more cold, hard cash to his savings.
How he "does" money: “One day, about five months into the school year, I was tidying his room and found a stack of 60 one-dollar bills,” says Tracy, his mom. “It turns out that he’s been saving a portion of his lunch money every day since school started.”
He doesn't just take, but also feels responsibility to pay for his own expenses. Not long ago, Joseph asked his mom if he could use her credit card to download a computer game. As he asked, he handed her the $32 he would owe for the download. “I have no idea how he got to be so responsible,” she says.
Kevin, 17, Newtown, CT
Kevin's accomplishments: Kevin saved roughly $1,200 dollars from a summer job so he could buy himself a new laptop. He also pays for half the gas he uses in his car. With graduation just around the corner, he’s focusing on next steps. “I have around $3,000 dollars in my savings account,” says Kevin. “I'm saving for college spending money.”
How he "does" money: To encourage Kevin to save, his family established years ago that half of all birthday and holiday money would go into savings. Kevin was allowed to spend the other half.
That financial responsibility has paid off. For the past two years, Kevin has been working summer jobs, and his mom decided to make him pay for half his gas in order to encourage financial independence. Out of his summer earnings, Kevin allotted an average of $30 dollars a week for spending money, and the rest went into his savings account.
In the end, every family teaches money differently, but the common threads are that it's important to start young and to empower our children to make their own decisions ... sometimes we can learn from them.