Released February 13, 2009
PINE BLUFF, Ark. - Whether it be a birthday or a special occasion, an ideal gift for your child is the gift of saving, says Rita D. Conley, family resource management specialist with the University of Arkansas at Pine Bluff Cooperative Extension Program.
"With today's automatic payroll deposit, Internet banking, drive-through windows, ATM machines and debit cards, many children experience the withdrawal of money as the primary banking transaction rather than depositing or saving money," says Conley. She fondly recalls going to the bank with her parents, going inside with her father and listening to him explain to the teller how much money he wanted deposited into their checking and savings accounts and how much cash he wanted back.
Here are some tips from Conley to get children on the road to becoming savers.
- For preschoolers, make sure that one of your gifts is an old-fashioned piggy bank and give your child change on a regular basis to deposit into the piggy bank. The bank can even be a recycled coffee can with a lid or a simple plastic milk jug. This is also a good time to teach children to recognize different coins and the value of each.
- When your child is school age, take him or her to the bank to open a savings account. Check your bank or credit union ahead of time to find out what type of accounts and services they have for children. Also, ask what information, such as child's Social Security number, parent or guardian identification, and the minimum deposit required to open the account. Money to be deposited can include allowance, money from doing chores around the house, spare change and gifts. Help your child develop one or two questions to ask the banking representative so he or she will feel comfortable.
- Make monthly or more frequent trips to the bank and go inside with your child. No matter how small the amount, have your child deposit a portion of any earnings or monetary gifts into his or her savings account.
- Help your child set up a short-term savings goal to make a purchase. Make sure the first purchase is something small so that your child can experience the feeling of accomplishment in a short time span. Continue this strategy; gradually set savings goals that take longer to reach.
- Consider giving your child a U.S. savings bond as a gift; explain that the bond will be worth more money the longer he or she keeps it.
- Finally, when your child gets his or her first job, stress the importance of opening a savings account along with a checking account and paying oneself first by making regular deposits in each. Help your child record the transactions.
Research shows that developing these habits at an early age continues through adulthood, says Conley. Giving the gift of saving can not only prove an enjoyable experience for both parent and child, but also it is the first step towards building wealth over a lifetime.
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http://www.uaex.edu/news/february2009/0213uapb.htm
Contact: Carol Sanders, (870) 575-7238, sanders_c@uapb.edu
