Savings Strategies!

What to do about a savings account for your children?

When your kids have made some money of one of the business ventures they have come up with, (our mini-course on 50 Easy Ways for Kids to Make Money is a great resource for business ventures) the first thing they need to figure out is how much they actually made.

Once they have figured out how much they made (after taking into account any expenses) have them take a small portion of it, say 10% and let them spend it right away.
After all, they have done an awesome job and if they can't spend any of it, they may question why they are doing all this work for anyways? This Instant gratification is very important, even though this article is about savings stategies.

After they had their fun spending their hard earned money, it will be easier for them to actually put some money away for later.
I can remember saving ALL my money I earned and it wasn't a lot of fun, it did not really inspire me to do something else to earn some more money right away. I did have my big end goal in mind but that would take a long time and for children a couple of weeks may seem like months or years.

Now, I advise to not have your kids put the rest of their earnings in one bank acount. Have them put it in 5 different piggy banks or one bank account and four piggy banks.

In my book "Why EVERY Child Should Have 3-5 Piggy Banks" I have explained this in detail. In short, the 5 recommended piggy banks are:

Money Making Money
Giving Away
Rainy Day
Special Treat
Just for Me

The money is divided in equal parts, so each piggy bank receives 20%.
With the scenario decribed before, the "Just for Me" piggy bank will receive a bit less, since we have had our kids already spend some of their earned money as the instant gratification.

Make it mean something for them!

Cheers.....Amanda van der Gulik.....Excited Life Enthusiast!

P.S. I'd love to see your suggestions on my blog.

P.P.S. If you are as serious about Teaching Your Child About Money and money habits as we are, make sure you sign up for our course.