Securing My Daughter’s Financial Future One Penny At A Time
What are you teaching your children today to expand their financial future tomorrow? As a child, I never understood the value of money and the importance of saving for the future? The main justification for this was simple: I just didn’t have the money to do so! Over the years, as a member of the workforce, with a steady income, and although I managed to save a few dollars here and there, I still never truly understood the value of money. It wasn’t until around 2005 when I connected with a great military officer, and now a dear friend, that I began to gather some lessons, appreciation, and understanding of the value and power of money. I am no Warren Buffett by any stretch of the imagination, but I can say that my knowledge base has grown significantly and I have made some smart financial decisions since.
I have now devoted my time to taking this knowledge and passing it on to my daughter Rebecca. It is very important that as parents we start financial advising at an early age. There are many benefits to doing so, such as developing one’s level of confidence, wasting less money, and living a better quality of life just to name a few. Rebecca has been very receptive to learning about money which has positively impacted her financial decisions even at a young age of eight-years old!
The starting process for me was a very smooth one. We followed five simple beginner steps that you too can do with your children. Here are the five steps:
Teach your children the language of money. It’s never too early to get started about money with your kids. It is no different than teaching them to read or to learn a foreign language at an early age. Starting early helps them to grasp the value of money, gives them a head start and helps in creating more responsible adults.
Start a piggy bank. The piggy bank will provide a visual representation of the process of saving. They can actually see their money “grow” in their piggy bank whether it’s a clear jar that they can see through or a piggy bank where the growth is measured by the weight.
Open a high yield savings account. With a savings account your child is able to physically take the money saved in a piggy bank, and transfer it into a place that you can reinforce as a safe place to store the money they have saved. They are able to walk into the bank, and go through the transaction process as any adult would by sitting and talking to a bank teller. This will help to reinforce financial values that can stay with them through adulthood. Here are some examples of banks that offer savings accounts for kids: Capital One, Alliant Credit Union, Bank of America, and Valley National Bank.
Let them help in the household financial decision. Think of an event or activity that your child is eager to participate in such as a birthday party. Make a list of all the items that you will need to purchase for the party. Get them involved in the financial planning phase and let them know how different financial decisions are made when determining the budget for different items.
Help then write and set goals. To help kids understand the language of goals and to feel comfortable, first explain the concept of goals and then share your own goals and aspirations with them. This can range from your plans to take a family vacation post COVID-19, or to lose some of your quarantine weight. Modeling your own goals can help to create believers and doers in your children. Additionally, teaching your children about goals can lead to great benefits such as taking the initiative to complete chores, virtual learning projects, and other activities without reminders from you to do so.
Rebecca’s experience with her piggy bank, I have to say, has been the most exciting. She participates in chores around the house to earn money.Two years ago, we opened her first savings account with one of the banks mentioned above. She uses her piggy bank to save her money that she receives from chores, rewards, and incentives. Every other month we take a trip to the bank where she deposits her money. It is important that when you take your children to the bank, you do not do any of the transactions for them. You must treat them like little adults and allow them to go through the process and conduct the transition themselves. This is the ritual that Rebecca goes through on our visit to the bank: Upon entering the bank, she first makes her coin deposit where she receives her receipt for the total coin deposited. She then fills out a deposit slip of the total coins deposited and the total amount of any bills that was in her piggy bank. Once all her information is filled in on the deposit slip, she then gets in line to the teller window to make her deposit. The conversation usually goes like this: “Good afternoon, I am here to deposit my money in my savings account.” At that time, as the parent, my only job is to provide the teller with my ID for account verification. Once provided, I step back and allow Rebecca to complete her transaction. The final question from the teller usually goes like this: “Would you like to know your account balance?” which is always followed up with a “Yes” from Rebecca.
Seeing her money “grown” is one of the most rewarding steps in our financial journey thus far. Recently, I was contemplating purchasing an item when Rebecca turned to me and said, “no you’re not getting that, it’s too expensive.” All I could say was “YES, she is becoming money smart!” Rebecca is very excited about the financial journey that she’s on and is eager to learn more about money. My goal as her parent is to put her on a financial path that will set her up for success in the future. Let’s secure our children’s financial future one penny at a time!
