Teaching kids to save money

Kids are advertising targets in the marketplace and statistics say they spend an average of $104 each week. From clothes to video games to compact discs, the message they receive is "spend". By the time they become adults, it could be too late to deliver the message "save". Encouraging positive habits is the goal of National Teach Children to Save Day on Tuesday, April 26, and Busey Banks Susan Abbott shares some simple, every day activities that help reinforce solid savings concepts: Q1: You suggest its important to make Savings Day "every day"... ·Teaching kids about the value of saving and the wise use of money is no easy task. It`s made harder for some considering that 25% of Americans fail to save anything at all on a monthly basis for long term goals. ·Short of winning the lottery or inheriting a fortune, most of us will have to build our fortunes $1 at a time, which is a great formula for anyones investment strategy: planning+action+time=success. Q2: What do you suggest for younger kids, say ages 3-8? ·Make it visible. Sometimes a simple action like putting change in a clear jar can help teach them some important concepts. "Time" is tough for them to grasp, but "I want" comes pretty naturally to kids. ·By encouraging them to keep adding change to the jar, kids get to watch it grow over time. Explain that at the end of the month youll count the change together and then buy something (like an ice cream cone or a small toy) as a reward. ·Always leave some change in the jar (say 10% of the total) to start off the next month. ·As they get older, teach them about budgeting by splitting the change up into separate jars marked for saving, spending and sharing. ·Earn it! Encourage kids to collect and return recyclables or check under the couch cushions when they help you tidy up at home. They can even help sort laundry and keep any loose change left in pockets. These activities help put extra coins in their jars. Q4: "Tweens" and teens are awfully sophisticated today.... ·The best message kids in these age groups may be "When you work, your money should, too". Pique their interest by explaining how money grows by "earning interest". Open a bank account for them and encourage regular deposits; perhaps each time you deposit your paycheck take them with you and ask them to fill out your savings deposit ticket. ·While many kids know that money doesnt grow on trees, they may think it comes out of a wall. Show them how an ATM works and help them understand that to take money out of the bank you must first put it in. ·Teens can certainly learn the pluses of compound interest and the value of time. Teach them the "Rule of 72" and theyll be able to figure out for themselves the number if years it will take to double their money. Simply divide the interest rate you earn into 72. (For example: 72/6 (interest rate) = 12. ·Capitalize on the time they spend watching TV and at the computer. These days, stock market performance often leads the news broadcast, and young people are naturally curious about making money through investing. Two sites recommended by the American Bankers Association: www.younginvestor.com has games and information to help both you and your kids get excited about saving and www.ntrbonline.org uses the animation and cool graphics that appeal to teens, while incorporating educational and informative content. Plus its managed and maintained by young adults.