8 of 12

Write now Article Tools

Teaching Children the Value of Savings.

When I was in grade school, a local bank offered a special program: a representative from the bank came to the school every Thursday morning to collect our savings deposits. The bank intended to gain young new customers, and maybe the kids might learn a little something about banking.

I vividly remember marching down the hallway, proudly carrying the envelope (containing five or ten dollars, as I recall) my mom had prepared for me that morning, and greeting the friendly dark-suited man waiting in front of the lunch room. I carefully dropped my envelope into the box he held, and had no idea what happened from there.

It was great to get kids saving money early, but unfortunately, they really didn't teach us what any of it actually meant.

I had the vague idea of there being, somewhere in that brick building downtown, a locked drawer (with MY name on it, mind you) that contained all my money. The self-same money I'd given them. I seriously believed that twenty-dollar bill signed "Happy Birthday! Love, Uncle Harold" was still safely sitting in that drawer, and that I could get it back any time I wanted.

I didn't quite grasp the concept of banking! In fact, I was absolutely horrified when I learned that the bank was lending MY money to strangers! How dare they?! I trusted them! That's MY money!

Unfortunately, this experience didn't teach me very much about saving (or money in general), and to be honest I didn't learn much more over time. Later on, in my teens, my mom gave me a blank check one day so I could get a haircut after school. I didn't even know how to write out a check; the hairdresser had to show me how to do it!

Most aspects of money are intangible, such as savings accounts, interest, checks, credit cards and ATM cards, and difficult for kids to really understand. Cashless, electronic transactions (such as debit cards) don't make the same mental impact as the physical act of parting with cash. Even an amount listed in a savings passbook doesn't seem "real", compared to the equivalent pile of dimes and quarters. (This same "unreal" quality of cashless transactions can be a problem for adults, too, but that's another article all together.)

However, the more tangible aspects of money are easy for kids to understand: a piggy bank filled with coins, for example. It's visible, it's countable, it's RIGHT THERE, and it's observable as it grows. Accumulating money in a piggy bank at home is a great way to begin teaching the concept of savings. It's a great way of teaching delayed gratification: encouraging kids to set goals and save money to get the things they want, instead of wasting it on junk (and setting themselves up for abusing credit card debt later on!).

On a regular basis, make a project of dumping out some (not all) of the change, rolling it in coin wrappers, and bringing it to the bank to deposit. It's important to keep some money in the piggy bank at all times, to tangibly illustrate how much the kids have. Explain that the bank keeps a record of how much you've deposited, and that the bank pays interest (not very much on regular savings accounts, I know!) in exchange for keeping the money there.

Also, your local library is a great place to find books about teaching kids about money. It's so important for kids to understand this vital part of daily life. Money management and the value of savings are not taught in schools, and parents rarely teach it (or worse, are poor role models with money); yet kids grow up and are expected to magically somehow know everything they were never taught.

Learn more about this author, Christine Conte.
Click here to send this author comments or questions.

Add your voice

Know something about Teaching children the value of savings?
We want to hear your view. Write now!