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Kindergartners and Bank Accounts
Posted on 3/12/13 at 9:01 pm
Posted on 3/12/13 at 9:01 pm
My son is in Kindergarten and was talking about saving up his money to buy something. So I told him about spending, saving, investing, and giving.
He asked about investing, so I told him about bank accounts and stocks. I told him banks pay you money to hold your money for you, which he thought was cool. He asked me how much the banks would give him to hold his money. After I told him how much money, he said "Ha ha. That's not a lot of money."
Maybe I should start him off in junk bonds, although he thought the idea of stocks was pretty cool.
How exactly does anyone encourage their kids to open a savings account these days with the horrendous interest rates?
He asked about investing, so I told him about bank accounts and stocks. I told him banks pay you money to hold your money for you, which he thought was cool. He asked me how much the banks would give him to hold his money. After I told him how much money, he said "Ha ha. That's not a lot of money."
Maybe I should start him off in junk bonds, although he thought the idea of stocks was pretty cool.
How exactly does anyone encourage their kids to open a savings account these days with the horrendous interest rates?
15
Posted on 3/12/13 at 9:04 pm to Bayou Tiger
Good grief man. He's in kindergarten.
Toss him a ball.
Toss him a ball.
Posted on 3/12/13 at 9:09 pm to Bayou Tiger
Future finance/economics major.
Posted on 3/12/13 at 9:12 pm to Bayou Tiger
Bit coins. It's like play money.
Posted on 3/12/13 at 9:24 pm to Bayou Tiger
First of all, your kid is going to be extremely bright.
Secondly, at his age I would just let him continuing asking his own questions.
Secondly, at his age I would just let him continuing asking his own questions.
This post was edited on 3/12/13 at 9:44 pm
Posted on 3/12/13 at 9:25 pm to Bayou Tiger
quote:
Maybe I should start him off in junk bonds, although he thought the idea of stocks was pretty cool.
Bitcoins motherfricker
Posted on 3/12/13 at 9:45 pm to Bayou Tiger
Roth account is an option for work that he can do.
Tax free and he would be way ahead by 18 than most by 68.
Sad but true.
Tax free and he would be way ahead by 18 than most by 68.
Sad but true.
Posted on 3/12/13 at 10:20 pm to Bayou Tiger
quote:
How exactly does anyone encourage their kids to open a savings account these days with the horrendous interest rates?
If he sets aside a certain amount every week, he'll have an amount he'll find amazing after only a couple of months.
quote:
have you explained to him the federal reserve system and how inflation is a hidden tax yet?
You know better than this, nobody hoards currency.
Posted on 3/13/13 at 8:31 am to Bayou Tiger
Buy a few shares of a stock in a company he knows and likes, for example, Disney or Coca-Cola. That's how I got my kids interested in the stock market and how businesses need to make a profit.
Posted on 3/13/13 at 8:43 am to Bayou Tiger
If you're just trying to teach the concept of saving, why don't you set the interest rate that the "bank" will pay. You don't have to be absurd about it but maybe give him a 10% rate that you deposit in addition to his deposits.
You could also do a "company match" where you match 10% of what he contributes to his savings, similar to a 401k program.
I also liked Russian's idea of buying stocks in companies that he is familiar with and likes.
You could also do a "company match" where you match 10% of what he contributes to his savings, similar to a 401k program.
I also liked Russian's idea of buying stocks in companies that he is familiar with and likes.
Posted on 3/13/13 at 8:43 am to Bayou Tiger
Opened a savings account for my little girl last year when she turned 5. Brought her there to set it up and she loved the attention everyone gave her. Now everytime we pass a Neighbors FCU she says, "theres my bank!" Every month we log online so she can see her balance. Our neighbor is 10 and didnt know kids could go to banks or what a savings account was. Point is start them young to a. Gain their interest and b. Get them in the habit. Dont worry about the returns at the moment. I figure when she turns 10 we will talk about stocks.
This post was edited on 3/13/13 at 8:48 am
Posted on 3/13/13 at 9:38 am to Bayou Tiger
One of the best things my parents did was setup a bank account for me when I was an infant. They started it with $1000 or so but after that I'd put in 100% of my birthday money until I was like 7 or 8, from then until my teens it was about a 25/75 split and then I chose to keep it at 50/50 when I was in HS.
Posted on 3/13/13 at 9:44 am to Bayou Tiger
Some ideas I have seen dont involve real bank accounts. Set up a series of piggy banks. Label each one for the various categories such as giving, savings, and spending.
Have them write out a long term goal on the savings jar. Something like a new bike. Set up a money distribution budget and each week you have them divide the money.
You could even give him interest as well, and find creative ways to force him to use the spending money. Perhaps even cause him to make a tough decision on his weekly contribution.
Have them write out a long term goal on the savings jar. Something like a new bike. Set up a money distribution budget and each week you have them divide the money.
You could even give him interest as well, and find creative ways to force him to use the spending money. Perhaps even cause him to make a tough decision on his weekly contribution.
Posted on 3/13/13 at 9:55 am to Bayou Tiger
I have heard as an idea that kids should be progressively more and more responsible for their own spending decisions. Sure, go ahead and give them an "allowance" but they decide how to spend.
For example, when a kid turns, say, 12, let him/her buy his own clothes and put enough money in the account to allow reasonable purchases.
They will, of course, make bad decisions, drain their accounts for dumb things, etc. Don't bail him out. It's better to get this out of the way early while the money involved is small.
For example, when a kid turns, say, 12, let him/her buy his own clothes and put enough money in the account to allow reasonable purchases.
They will, of course, make bad decisions, drain their accounts for dumb things, etc. Don't bail him out. It's better to get this out of the way early while the money involved is small.
Posted on 3/13/13 at 12:03 pm to Bayou Tiger
get a shadow box frame and put a picture of what he wants to buy in the frame. Use the box part as a bank and drop money in there so he can see the box filling up with cash.
Put coupons on the fridge with magnets so he can work towards more savings for what he wants....$1 to vaccuum, $1 to take out trash, etc.
Finally, offer him a "match on his money" like interest from your pocket if he saves $x toward his goal.
Put coupons on the fridge with magnets so he can work towards more savings for what he wants....$1 to vaccuum, $1 to take out trash, etc.
Finally, offer him a "match on his money" like interest from your pocket if he saves $x toward his goal.
Posted on 3/13/13 at 1:39 pm to Bayou Tiger
quote:
How exactly does anyone encourage their kids to open a savings account these days with the horrendous interest rates?
Just like you do anything else with your SIX YEAR OLD. Make the decision for him, and just open the account. You don't need his permission.
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