I previously wrote about how we’ve gone about setting an allowance for our kids. Briefly, starting at age five they get $0.50 per year of age per week, and this (along with all other money coming in from gifts, etc.) gets divided into one of four pots — spending, short term savings, long term savings, and charity. This weekend I sat down and took the time to set up online bank accounts to hold their long term savings. Since we already bank at ING Direct ($25 account opening bonus), I simply created a subaccount for each of my kids. I then ‘swept’ their long term savings from the container on the kitchen counter into their new accounts — this amounts to sticking their money in my pocket and then transferring the same amount from our main account to their subaccounts. I figured that I’d let them collect up their long terms savings a month at a time and then, on the last weekend of the month, we’ll sit down and move the money into their accounts. Despite having done this just two days ago, they’ve already asked a couple of times if they could login and look at their money. I can only imagine their excitement when they see that first interest payment!
Kids & Money: Long Term Savings
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2 Responses to “Kids & Money: Long Term Savings”
After just posting a comment on this subject elsewhere, I found this discussion. I definitely want to mention this website that my friends with kids have been using that helps them open up an online savings account, just as you said. http://www.earlyearners.com
It’s a great mechanism for teaching about the importance of saving.
I think on-line savings accounts are a great idea for kids. I remember when I first started with a passbook savings acount, and I know my nieces and nephews have accounts but I think landlocked bank savings is just too accessible and tempting. An ING makes them really look at what they’re doing.