Survey says ….
yep, I know, time for me to once again shamefully pump the peoples of the internets for their opinion. You guys helped me through handling my daughter’s steroid rages, naming our new dog, what kind of doorbell to buy for upstairs, when and under what guidelines my children should get cell phones, and …….. other stuff, I’m sure, I just can’t think of anything right now.
So here’s my next parenting question ………… at what age (and I KNOW, blah blah, blah, different kids, different maturity levels, different responsibilities …. ETC) do you think kids are old enough to manage their own savings accounts?
My children are required to put 40% of their weekly allowance into a “save” envelope, and when that amount totals $20, they give it to me, to put in the bank. Blaine and I also make a monthly contribution, and our children understand this money is to be used towards the purchase of a car when they turn 16 — absolutely no dipping in before that, no how, no time, for any reason, period. At the rate we are saving, I suspect we will have three dented, rusted, Chevy Novas in our driveway in a few years.
Since Blaine and I bank out of state, we set up our kids’ savings accounts at the same out-of-state bank, so I mail in the deposits. I also balance the statements when they arrive every three months. I am considering transferring those funds to a local bank and having the children actually MAKE the deposits, and balance the account themselves, in an attempt to teach them basic banking skills. Don’t mock me …. I still balance my checkbook the old fashioned way ….. with a paper statement and a calculator. It makes me happy, so zip it, and I want my kids to learn the old-fashioned way as well.
So at what age should I expect my kids to handle their own savings, with parental supervision, of course? I’m thinking I could have done it way before now …. I just have visions of something a little more grown-up than accompanying my child to the bank with a piggy bank full of change in my head …. wondering if I’m on track, or if anyone wants to make any suggestions for teaching my children good money management skills. And what’s the worst that could happen? I wind up managing the accounts just like I am now, only they are local? Or that Brayden could begin dating a high school drop out named Bongo who convinces her to pilfer her account to buy drugs for him and his burned-out, delinquent friends????
sorry, mom-imagination went off track there ……
For the record, I have one that spends money like water, one that could probably squeak nickels out of his rear, he’s so savings-conscious, and one who is happy to spend her own, but just assumes when she runs out, the Bank of Mom and Dad should happily chip in.
Opinions??? And thanks in advance.
26 Responses to Survey says ….
February 18th, 2010 saat: 10:45 AM
I had a savings acct when I was young. My mother would drive me to the bank and I would go in all by myself to make the deposit. It really made me feel responsible. I must have been 8 or 9 when I would go by myself. I had a passbook but I really think a register would be great. My son’s saving is now linked to our checking acct so we can pull up his acct on line to look at it. If I lived in the States I would make him go to the bank. I ended up using my savings to buy my husbands wedding ring when we got married…I had only saved about $1500…but still it was a good lesson. Good luck on your decision.
February 18th, 2010 saat: 10:54 AM
We did something similar when my kids were younger (although not to save for a car but other necessities) and the accounts were held in trust for them and managed by me. When they were teenagers(Grade 7) we became joint owners of the bank account so I could continue to monitor the accounts and they started doing all their own laundry as well. (my theory old enough to manage your money, old enough to do your own laundry)
We gave them valuable, extensive and thorough financial information, coaching them through any rough spots (read lectures and many arguments) throughout their teen years in managing that money and I am proud to say that now in their early twenties they have excellent credit ratings, manage their budgets successfully, and can operate a washer and dryer to perfection. ;)
February 18th, 2010 saat: 10:55 AM
My 9 year old daughter has handled her savings account since she got it when she turned 8. She loves looking at her monthly statements that I still have mailed to the house, and seeing how much interest (probably .39 so far!)she has earned. However, my 12 year old son couldn’t care less, reading your post made me wonder if I need to work with him more.
February 18th, 2010 saat: 11:01 AM
My mom started our out-of-state savings accounts for us when we were kids and I still use the account (I’m now 31.) I think she let us control more of it when we were about middle-school-aged, possibly early high school? It was out of state, so it was a little trickier for us to abuse it. When I was in high school, I did get my first checking account at a local bank. I admire you for teaching your kids this responsibility. I can’t give you an exact age to start giving your kids even more responsibility with their money (I don’t have children, so who am I to give that kind of advice?) I can say that I think I was around 14 or 15 when I got an account – with my mom still a major name on that account, of course.
Sometimes I still wish my mom was on my account, so she could cover my mortgage payment.
February 18th, 2010 saat: 11:31 AM
My kiddo is 16 & has a job. He is *required* to put half of his paycheck in the bank every payday. If I’m not with him when he goes to cash his check, he does just that – CASH IT. His account is a minor account, which means he can put in as much money as he wants, but to withdraw any he has to have me with him.
I think we were 13-14 when we got our first bank accounts & they were full savings accounts. I was the spender, my brother was the saver… I think it’s still that way :D.
February 18th, 2010 saat: 12:00 PM
Hi Kristie,
Check out gailvazoxlade.com – she has an excellent website and their is a section on kids and savings. She is our Canadian financial guru, and I believe her show is in reruns on CNBC in the US.
Regards,
Elaine
February 18th, 2010 saat: 12:01 PM
I can’t believe I made a typo of the worst kind, the kind that makes me crazy!!! *there* not *their*!!!! :)
February 18th, 2010 saat: 12:11 PM
When I was 7 and my brother was 8, our parents started us savings accounts. Every Friday when we got our allowance ($3), we would go to the bank and deposit $1. My dad helped us fill out the deposit slips. LOL Then we would go to the store and spend the other $2 on candy. We didn’t get statements, but we did love seeing the bank book updated with our balances. It was a great way to start saving.
I was a great saver and my brother was not… but they started us off right! I was definitely old enough at 7 to grasp the concept of saving… my dad said one time when I was about 8 or 9 years old, he picked up my wallet and shook it, and then counted what was in it… and I had managed to squirrel away $80! haha
February 18th, 2010 saat: 12:11 PM
There are so many good suggestions already! My parents opened a savings account for me when I was quite young but then we fell on hard times, and they were never able to add to it. Also, I never got an allowance like normal kids…if I needed something, parents provided it…if I wanted something, I either got it for birthday, Christmas, or I saved up from my birthday, Christmas, and report card money (closest to an allowance but only 4 times a year) and get it.
I’m not sure if I’m clear about the reason for the possible new accounts…are you wanting these to remain the car savings accounts, or do you want the kids to use them to save up for things they want? I think if you want them to save for a car and also have a general savings that they can use to get stuff they want, you are going to have to have 2 separate accounts for each…otherwise, they would end up dipping into the car fund.
So…I would say that if the purpose is to move the car accounts closer and have them save at home (in a piggy bank or whatever) for stuff they want, then I say, move them closer and let the kids start depositing. If you want them to have a general account to put into and be able to take out of, I would say to leave the car account where it is and open each of them a general account locally.
Either way, I like the idea of the accounts being linked to yours or at least accessible to you…my dad’s account is linked to mine, and while I can’t take money out or deposit into his account, he can take money out or deposit into mine. Also, I loved the idea of the minor account where money can be deposited but a parent has to be present to withdraw it…might work especially on the car account but would be beneficial on the general savings account so you could have an idea on what they were using their money for.
I hope that made sense…my mind is a little fried right now. Bottom line: From what you write, they all seem old enough and mature enough to handle any type of savings account, with a little parental guidance, of course.
February 18th, 2010 saat: 12:15 PM
I got my first savings account at age 10 in 5th grade. The school sponsored it and had room moms come in to be the “bankers” once a week but it was through the local bank. My mother was on the account as well, but it was (supposed to be- but that is another story altogether!) my account. I dutifully deposited money every week for the whole school year, then continued to deposit money (having my mother or grandmother drive me to the bank)once the year ended and I moved to middle school. I enjoyed learning how to figure out how much interest I was earning and set saving goals. So yeah, I think your kids could do this. You may want to check- lots of banks have “student” accounts for this purpose which don’t charge some of the fees other accounts might.
February 18th, 2010 saat: 12:23 PM
I don’t think it matters where the accounts are held – in state or out – as long as the kids start watching their statements and seeing their savings grow. I also like the idea of needing two signatures (one kid and one parent) in order to withdraw money. I have two kids – one is very thrifty and one goes through money like water, and they have had savings accounts since they were small and checking accounts once they were 15 or so. When they were about the ages of your kids, in order help them realize that all things come with a price and that I don’t have unlimited funds (I wish!), I made them pay my monthly bills. I gave them my checkbook and they wrote out the various checks for mortgage, utilities, etc. and I signed the checks. I think they were shocked that is costs to have water piped to your house and for having the garbage truck come. Kids just don’t have a grasp on that reality. It made them a bit more responsible with their own money, because they knew that my money was going to maintain the household.
February 18th, 2010 saat: 2:50 PM
Kristie – I still bank the “old fashioned” way with a paper statement, pencil, and calculator too. We also bank by mail. Our bank is local, but now too far away to run by with deposits, etc. However – when I was growing up my mom made me keep a notebook to log all the cash money I had. I was required to log where it came from, where it went, and always have a current balance. She did take my brother and I to the bank to physically make deposits in our savings accounts. I started earning money babysitting and with paper routes young (do those still exist?), so I had a lot more $ to keep track of. Then I got my first real job (with a paycheck) at 14. I think I got my first checking account when I entered high school. My mom’s signature was required for savings withdrawals for many years. I think when I got a checking account her name was still on everything, but I no longer needed her signature. She still checked my accounting for a bit, but I was soon managing it all on my own.
All that to say, I don’t ever think it is too early to teach your kids to manage their money – and I am all for taking them to the bank. I think it helps them to physically hold the money and see it leaving their hands. It gives them a better awareness of it all. I don’t know if the way my mom did it with me is the BEST way, but it worked really well. I have never had trouble keeping track of my $ or balancing our accounts.
I would go ahead set up local savings accounts for your kids so you can take them to the bank. I would keep the old out of state accounts that you deposit into with the big $, but let them manage a smaller local one. I’m sure you can still set it up where your signature is required to take $ out. Good luck!!
February 18th, 2010 saat: 3:07 PM
All of my kids (12,10, and 5)have savings accounts, as well as access to online banking. That way they can see their balances at any time. The online banking through our credit union allows us to open “subshares” so they each have a subshare for long-term savings. When the balance is high enough for a certificate, they open that up (with my assistance). I am on the account with them, and they each have ATM cards that I carry with me. That way they can access the cash from their primary share, but not the long term savings. We have set up an automatic transfer for their allowance, with some going to each share.
I think it is important that they realize that even though it is just numbers in the computer (or on the paper), that it is still real money! Knowing that if their balance says $100, they only have access to $100. I also work at the credit union, and I have seen far too many young adults get into financial trouble becuase they didn’t know how to check balances, or didn’t care.
Everybody has a different method, just make sure that they are on board, and not fighting you regardless of which method you choose. If they aren’t receptive, you are just wasting good oxygen.
Good luck,
Stephanie
February 18th, 2010 saat: 4:01 PM
When I was in high school, my mother received child support payments from my father. She put the money in a checking account in my name (joint with her). I got money occasionally and put it in the same account. At home, I had a notebook with columns for “short-term,” “mid-term,” and “long-term” goals for my money. I wrote the checks for the tuition at my private high school, and that came out of the long term account, which is where the child support went, too. I also got to decide what I wanted to spend the “mid-term” money on, but that required conversation with my mom. The “short-term” money was mine to spend as I saw fit. Of course, I had to write a check, and my mom saw the statements when I balanced the account each month, so there wasn’t a lot of room for deception or overspending.
You could talk about short, mid, and long term goals. The long term goal you’ve set is buying a car, but perhaps they could find a worthy cause for a midterm goal (an educational game/video, that suit that Kellen needed for the cruise, new shoes at the beginning of the school year, etc). You might even be willing to increase what you put in the account knowing that the extra is going to something that they can watch add up. You’d be spending the money for that item anyway, but they could tell you when there was enough. Maybe the other 60% of their money still goes in a local account that could be short term goals.
I think a lot of this depends on how much they like numbers and math. I loved them! But, I can imagine that a kid who hates those things wouldn’t like being bothered with the balancing of the checkbook just yet.
February 18th, 2010 saat: 4:09 PM
I got my own acct. in 4th grade, started working on charting my savings then. My kids started as infants, they go into the bank & do their deposits now that they’re older. They have those educational savings plans that Dave Ramsey recommends (the money show guy), but the kids don’t deal with those at all. So I say, do it yesterday, get going!
That being said, do 16 year olds need their own cars? I didn’t even get a license until I was 23. The accident rate is so high for teenagers & with the restricted licenses they get now (at least in CA), they are useless for helping transport the other kids. Our plan is to do the same thing we are doing with cell phones, when do they NEED to drive? When their not driving impacts the family negatively because it’s a hassle.
February 18th, 2010 saat: 6:19 PM
I think that is such a good idea to start them as soon as you can! When I was younger I didn’t really learn how to manage money (I’m 20 now). I got my first checking account when I got my first job (at 16). I didn’t get any money from my parents to help out (as I didn’t really have expenses). I had a teen account that didn’t penalize me as much when I had an overdraft (which only happened once, thank god), but my parents did help me through that. I think starting the kids early will help in the long run!
February 18th, 2010 saat: 8:08 PM
Well I don’t have children but when i was 12 years old, my grandmother passed away and each of the grandchildren got a small amount of money and my mom (who works at a bank) took me in and set me up a savings account. From then on I have had my own, there was settings on the account where i couldn’t access it without her signature as well other than deposits since I was a minor. Not sure if that was bank regulation or something my mom set up on her own. Hope this helps.
February 18th, 2010 saat: 10:52 PM
My son has had a savings account at our local bank, which offers internet banking. He goes to the bank and physically makes a deposit, but he can also see his savings grow and track his interest online. He loves it and I can keep a close eye on it as well.
February 19th, 2010 saat: 12:10 AM
We have accounts set up for each of the kids at our local bank but we’ve never taken them in. We print out their online statements on Sunday nights. My dh tracks their accounts in Money and they can access them whenever they want so they can see what’s due to come out. We make all our kids pay for any online games they want (darn Runescape) and our 2 eldest sons have to pay for their texting and data pack on their cell phones. They know this money is coming out of their allowance before they even get their money. They also have to tithe and put money in savings.
Like you my 5 kiddos all have different money personalities. Our 14 year old has a job and he gets a portion of what he earns. The rest goes into his savings account – he’s saving for his first horse. Our 13 year old spends everything before he gets it.
I’m going to watch the comments here very closely – we’re looking for some of the same things you are in figuring out how to help them become better stewards of their money then their Dad & I. I’d hate for them to learn the hard way like we did. ;)
Looong-day-Mom to:
Daniel-14
Scott-13
Bryan-11
Sarah-9
Dana-9
February 19th, 2010 saat: 12:23 AM
We’re starting this now, at ages 6 and 4. The kids have gotten their own “deposit” books from the bank, and will be bringing it in to get their deposit stamped and get a lollypop. I’m trying to instill in them that saving is fun- and when their statements come in the mail, they get to open them. (big stuff over here).
February 19th, 2010 saat: 12:50 AM
My child liked going to the bank to deposit birthday checks and allowance he had saved. I would suggest keeping the out of state accounts as they are (out of sight, out of mind!) and finding a local bank for new accounts they tend to personally.
I have to say, I would not be able to sleep if my 16 yr old had a car of his own!! Ouch!!
:-)
February 19th, 2010 saat: 7:52 AM
I would say do it now with all three of them. My thought would be to keep the out-of-state accounts and continue to sort of manage them but also let them open accounts at a local bank so that they can get used to going in and making deposits. We started savings accounts for our two kids when they were like 7 and 8 and both my husband and I are joint owners with them. When they were about 10 we showed them how to go online and check out their balances. When they started working, around the time they turned 14, they opened checking accounts (which we’re also joint account holders) and they’ve been really great about handling those. They’ve always balanced their own accounts, gone online to transfer money from their savings to checking if they need to and all of that. Really, you can’t start too early.
February 19th, 2010 saat: 9:35 AM
We started our two kids out with savings accounts when they were very young – 2 or 3 – they kept their savings in a piggy bank and then when it was full took it to the bank for deposit – lollipops too!
When they turned thirteen, we sat down with them and created a school year budget (clothes, lunch money, movies, etc.)that we funded monthly – and we were generous but not overly. They got checking accounts linked to ours when they turned sixteen (rarely write checks but use the debit/atm cards.
During the summers our kids funded their “living expenses” from their summer jobs and were required to save the rest.
We were fortunate to be able to pay for our kids college expenses, so our deal with them was – you work summer jobs and save your money and we will continue your monthly allowance – no work – no allowance.
And so you’re probably wondering what they are saving for – we call it their “starting out on your life money”. The money needed after you graduate from college to buy work clothes, make a deposit on an apartment, downpayment on a car, etc. Neither my husband nor I had these kind of funds when we were starting out – we had to borrow them.
Our daughter graduated from college last spring – it has been fun to watch how carefully she spends now that she is using her money.
Our kids did have access to a car when they were sixteen, but they had to share it and it belonged to us.
Loved the comment about having kids write checks for the family bills – what a great way for them to understand how expensive it is to support a family.
February 19th, 2010 saat: 10:08 AM
Kristie, my children had savings accounts from around age 8. Madie opened her account two years ago, around age 9. I was just not comfortable with her keeping that much money in cash around the house. She is both a ‘saver’ and a ‘spender’, but she spends very wisely! Her method of saving is that any money she gets, she will put half in the bank. I don’t buy any candy, gum, or stuff when we check out at the store—she has to buy it. If she wants clothes or shoes that are more than I can afford, she has to pay the difference to get that higher priced item. (ie….I can afford a pair of jeans, but if she wants ‘designer’, she has to pay the extra cost)
This worked great with my two boys, as they loved designer shoes and jeans!
The rule for withdrawals is that it is ‘her’ money, but I have to approve any purchases. I try to point out the good and bad points of each one, so she doesn’t make snap decisions. And any purchase over $50 must be thought about overnight. There has been many times she woke up the next day and was glad she did not spend her money!
What is funny now is that she might buy something, but leave the tags on them for a few days! She even has taken a few things back! (too cute for an 11 year old!!)
Good luck!!!
February 19th, 2010 saat: 6:16 PM
What they need to learn is different now – we do have joint accounts that are linked but they also get daily text messages to their cell phone of their balances- VERY helpful. Most kids these days never carry around around a check register and write down transactions – not gonna happen! They DO need to look at transactions online frequently and understand the overdraft costs. They will mess it up. They do need to learn to handle online bill pay, online transaction review. Forget monthly statements, its a new online world they need to learn and it will take them a few mis-steps to get the hang of it. Start now!
March 4th, 2010 saat: 2:35 PM
Check out http://www.crown.org if you haven’t already. They have a few kids resources there, including Handling Money God’s Way, and In God We Trust. These have been excellent resources for our kids, and Crown Financial Ministries has been an excellent resource for me years ago.
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