The American Bankers Association is sponsoring a Teach Children to Save Day. Today!

Participating banks are sending bankers into the schools today to talk to the students about saving.

We are doing a lousy job as parents teaching the next generation to save. We have a negative savings rate in this country. That hasn’t happened since 1933.

All kids should master the concept of saving. A savings account at a bank is good although interest rates are so low its hard for them to see much of an increase month to month. You can always be the banker and offer a higher interest rate for them to save. 10% would be an easy number for them to understand.

Get a few piggy banks and label them, spending and saving and long term saving. Long term for an 8 year old is about a year. Encourage saving part of their money gifts and allowance. Each month take the money out of the banks marked savings and add the interest earned. You are teaching them about compounding interest! Once they manage to save $50 then set up a savings account at a bank.

The other piggy bank is theirs to spend how they wish. No restrictions! Let them make mistakes with small amounts of money.

Once your child is working and earning money consider helping them open a checking account. You want them to have experience of budgeting and paying bills before they go off to college or are out on their own. Everyone should know how to balance a checkbook!

Getting a checking account for someone who is a minor (under 18) may not be that simple. Banks don’t like to deal with minors so you may have to co-sign on the account or set up a custodial account. Doable! 

Teach your kids banking skills. Should they have their paycheck automatically deposited or will they stop in each Friday with the check to make a deposit? Should they have an ATM card so they can withdraw their spending money?

Should they try using bill-paying software such as Quicken or Microsoft Money? Much easier to balance their checkbook using computer software but they should do it a few times manually so they understand the mechanics of it. How far do you carry this? Checks they can print out on their computer? On line banking would be a good skill to learn but most banks will not allow it for a minor under 18.

While you are at the bank pick up all of the free literature at the bank. Talk to your kid about checking accounts, CDs, ATM cards, credit cards, loans, mortgages, car loans, school loans and business loans. How does a bank make money? Why do they charge for checking accounts? Use of the ATM machine? What’s the interest rate on a home mortgage? If you have a 30-year mortgage how much interest will you pay over the life of the loan?
 

Did you know?

In the 15th century the poor did not have bank accounts nor could they afford metal utensils. They used clay dishes made from a type clay referred to as pygg. They saved their coins in pygg clay jars. Soon becoming piggy clay and then piggy banks and then an actual pig shaped container.
http://www.ideafinder.com/features/everwonder/won-pigbank.htm 

A special thanks to the following banks for participating in Teach Children to Save Day:

Bank of Canton, Canton
Benjamin Franklin Bank, Franklin
Clinton Savings Bank, Clinton
Country Bank, Ware
Danvers Bank, Danvers
Dedham Institution for Savings, Dedham
Eagle Bank, Everett
East Boston Savings Bank, Revere
Milford Federal Savings and Loan Association, Milford
National Grand Bank, Marblehead
Peoples State Bank, Madison Heights
Salem Five Cents Savings Bank, Salem
South Shore Cooperative Bank, Weymouth
South Shore Savings Bank, Weymouth
Strata Bank, Franklin