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February 24th, 2010
Teaching Young People To Save

When I was a child, we had a weekly banking day at school, and we’d take along a small deposit for our savings account at the local town bank. It wasn’t a large deposit—usually somewhere along the lines of 20 or 50 cents, but it was surprising how much our bank accounts grew. It was a great lesson in saving, and one I took with me into adulthood. When I started my first job, I saved part of my wages each week as well—a good decision as it happens, since I returned to “school” and trained in accountancy, paying my own way for two years before getting a job again.

Money Tree and Saving

These days, I’m constantly surprised by the way people live from week to week and spend their entire wage. When I worked at McDonald’s and did the wages, the mainly young crew were always short of money, blowing their wages well before it was pay day again. My sister-in-law paid the wages for an older workforce and they behaved in much the same manner.

My twenty-four-year-old nephew spends all his money, usually because of a huge phone bill and socializing. The only reason he saves any money is because he still lives at home and his mother takes part of his wages and banks it. He can’t withdraw the money without his mother’s signature.

From my observations, the lack of saving for the future happens outside of New Zealand too. I think it’s important to save a little, either to cover emergency expenses that hit us all at times or for a special treat for the family such as a holiday or a new gadget. Does this make me an old fuddy-duddy, because most youngsters don’t seem to care and expect their parents to fix the problem?

Quite frankly, I think there is a point where we, as parents, need to step back and let our kids stand or fall on their own, and this includes the arena of personal responsibility with money. Maybe some of these firms who lend money or offer interest free loans to purchase consumer goods should also have to back off a bit instead of making the lending process so easy. Maybe instead of giving loans for one hundred percent of a consumer item, the purchaser should have to come up with a larger deposit.

What do you think about saving? How to you teach your children to value money and save for a rainy day?

14 comments to “Teaching Young People To Save”

  1. I totally agree with you, Shelley.

    Honestly though, I think some of it is a personality thing. I’ve always been a saver, as is my husband, but others in our families? Not so much!

    I’m trying to instill this in my own children by giving them an allowance. Then, when they want something like a bag of chips or an ice cream, I ask them if they want to spend their allowance on it or would they prefer to save it toward a larger goal (like a coveted toy at the store) Most of the time they still go for immediate gratification, but I’m hoping this is just a long process because I do not intend to financially support them for the rest of their lives!!!


  2. I agree with you. I grew up poor and that seemed to have made me a saver. I save every dollar I can through couons, cash back, going to other stores for sales, taking surveys for extra christmas money.

    But I seem to be the only one in my family to think this way. My daughter who is now 18, and her 20 year old boyfriend go through money like it’s water.

    If they didn’t have these crazy cell phone bills because their phones have to ahve all these bells and whistles that I just don’t get, they could be saving some money. But it seems instant gratification is the thing everyone is into these days and I for one jsut don’t get it.


  3. Oh Shelley. You’re standing on my soap box. LOL! I get incensed when I see adults spending foolishly, only to see them struggle to pay the house note. Good saving (and spending) habits should start early.

    I thought your ‘bank day’ was brilliant. What a wonderful way to teach responsibility. I can’t recall that my parents ever had anything similar to that, though they did insist that I pay ‘room and board’ as soon as I started working. (I started at thirteen.). It helped the family finances and it helped me to understand debt and responsibility—a lesson that stayed with me.

    I write about saving money regularly under my Prudent Penny posts, so your post is very near and dear to my heart. Thanks for posting this!


  4. When each of my kids turned a certain age, they started getting an allowance each week. It was half their age and they got to spend it at school on the snack machine or bake sale day or save some to buy whatever they want. There are 2 on this program now, and they both save for toys and games. It is to heartwarming to see.

    Your comments about lending and borrowing? Ah, that’s the basis of the mess here in the US, just on a much grander scale!!


  5. This is a tough one, as my husband and I are thrifty and we are trying to teach our children the same fundamentals.

    Right now, we do one big thing per year (the circus) and the children are aware we “save” for the event. When it comes to toys and the like, they are given a spending limit for doing their chores/homework/etc at the end of the week.

    We’re not too strict yet, but I’m hoping we don’t have to be. So far, none of my kids are nagging me about things like cell phones or texting (although my daughter is reaching that age). I guess only time will tell.


  6. Money management should be taught in school from kindergarden on.

    WW – Toil and Trouble


  7. Jenyfer – I guess it helped that we lived in the middle of the countryside with nowhere to spend our money while we were youngsters. There was no temptation to spend.

    Mary – The easy credit certainly makes instant gratification simple. I think a lot of people go out shopping to perk themselves up too.


  8. Maria – don’t you have something like that in the US? I’m fairly sure that our schools still have a banking program to encourage young people to save.

    Kaily – I have to admit that I watch the US situation with amazement. While we do have a bit of a problem down here, our banking institutions are fairly solid.


  9. Jaime – it sounds as if you’re doing a good job, but that cell phone age is dangerous!
    When it comes to instant gratification I think that peer pressure makes things even worse. A lot of our schools ban cell phones etc and part of the reason is to lessen the peer pressure for the children of parents who can’t afford phones for their kids.


  10. Nessa – while I agree that this sort of thing should be taught or reinforced at school, I think parents should play their part. Parents who lead by example really help a child in this respect.

    Maria – I forgot to mention that I paid board when I started working. It was a point of pride for me and I knew I was helping out my mother who was a single parent.


  11. I grew up with an allowance and knew if I wanted something big my parents wouldn’t buy it for me I had to save for it. I remember saving up in Jr. High for 4 months my allowance & babysitting money to buy a leather jacket.
    Emma is 5 and right now she wants a fish. So we bought a fishbowl and whenever she is good or helps around the house she gets coins to put into the fish bowl. She has dipped into the bowl for treats every once in awhile but she knows it’s her money. It’s been almost 18 months since we started and the bowl is almost full. I guess we better start learning how to care for a fish… LOL!
    But I agree, I have friends who live paycheck to paycheck with no savings and spend money on things I think they could forgo. I like to give any graduating HS sr I know a copy of “Personal Finances for Dummies” because it really spells it out in plain language.
    All that being said, my hubby saves money because I just can’t seem to.
    Hugs!


  12. My older daughter has moved to Norway and is living off a friend there while learning the language and job hunting. She’s beyond my help and wouldn’t listen to me even when she lived here. And when she did have a job here in the states, The money just seemed to burn a whole in her pocket. It went out as fast as it came in.
    My younger daughter though, is starting to get it. She’s 19, pregnant, and jobless. She is really starting to grasp the financial thing. Too bad she is currently experiencing enough problems with the pregnancy that the doctor said no work til further notice. We’ll know more next week at the 20 week check-up.


  13. Amy – I hope you have better luck at keeping fish alive. I refuse to have fish now because they always die on me! It’s not a good feeling when you check out the fishbowl and find the wee fish belly-up. :eek:


  14. Beth – it’s hard. Sometimes I think we just have to let kids go and make their own mistakes.