A new survey shows that 85% of parents with kids ages 8-14 say their children have piggy banks.
No, it’s not 1955 again. That’s the good word from T. Rowe Price (Stock Quote: TROW), in a July 2009 poll of 504 U.S. Moms and Dads. The survey reveals that having a piggy bank sets a good example for kids and creates good money at a young age.
What’s more, a clear majority of parents surveyed said that taking money out of the piggy bank was a “shared responsibility”, while a third said it was all up to junior (or junior-ette) to crack open the piggy bank for some spending money.
This much is clear. Teaching kids to save money with a piggy bank is a win-win-win. Kids get a great lesson on the value of money. Parents instill good personal finance habits for their kids at a young age. And banks get a ready-made audience of future customers who already understand the importance of saving money and the value of passive income (interest earned on bank deposit accounts).
That’s what a good piggy bank can do. OK, duly noted. But what other good financial habits can parents instill in kids? Let’s have a look:
Manage your child’s allowance. – The T. Rowe Price survey says that 41% of parents who give their kids an allowance say that the money runs out before the next allowance date. To nip that problem in the bud, refuse to give kids an advance on their next allowance, or any money at all, for that matter. When they plead for the advance, tell them that living within your means isn’t a luxury – it’s a necessity.
Take your kids grocery shopping. – The old adage of “show, don’t tell” is rarely more appropriate than on a trip to the grocery store with your children. When a child sees a $6 price tag on a jar of peanut butter, it gives them a clearer picture of the real cost of things in their everyday lives. Best bet: take a calculator and, if your child is at least in grade school, have her add up the items that fill your cart as you go along.
Install a “24-hour waiting period.” – Impulse buying is a huge bug-a-boo with children. Anyone with a 6-year-old knows the drill: “I want it – and I want it now” is a common refrain at the toy store or video game outlet. When this issue crops up again, tell your child he can have the toy or game – but only if he waits 24 hours to cool down and really think about it. Even then, make sure that he contributes toward the purchase – from his birthday money or from an allowance.
Open a savings account. – It’s a big day when your child graduates from a piggy bank to a real bank account. When this day arrives, take your child to the bank and show them how you open a bank account. Keep adding allowance or gift money into the account and show your child the bank statement, so she can watch the account grow. Better yet, show her how the account declines when she spends money. To find the best savings account rates, visit BankingMyWay.com.