In the Murphy household, the kids all got allowances in grade school and we helped them open bank accounts once they started earning money working after-school jobs. They were also encouraged to save early on and the two older kids are developing good instincts so far.
How does our approach stack-up against the rest of the country? How about your approach? A recent survey conducted by an company known as DoughMain, based in Princeton, NJ, asked 2,000 parents across the U.S. about kids and savings.
Among the findings:
The study also suggests that the older kids are, the more likely they are to have opened a savings account, although less than half of these kids review their monthly statements with their parents and even fewer use online banking.
DoughMain believes familiarity with banks and savings can go a long way toward making kids better savers as they grow-up, and the company has developed a website, doughmain.com., that aims to do just that. It's a free website, although a sign-up is required to access most of its features. It should also be noted that while DoughMain is not a bank, the company has partnered with what it calls "major financial institutions" on the development of the site. This is partly to enable parents and kids who are already customers of certain banks to link the site to family bank accounts so that parents can help their kids keep an eye on savings online without entering them into full-fledge online banking. DoughMain also says it makes an effort not to do any hard selling of bank products, although certain items like gift cards are offered.
The website also offers a series of tools like allowance and chore calendars so kids and parents can keep up with when payments are due and can use a point-system for chores completed if that's how the kids earn their allowance, the same sort of monitoring kids will have to employ once they start earning a living and paying bills.
As previously mentioned, it takes a free sign-up to access some of these features, but for those less interested in so formal a relationship, the site also offers some fun, money-related games for kids from 5 to 12 that can be sampled without acquiring a log-in.
Meanwhile, the DoughMain survey also alludes to some additional child-related money matters that speak to a couple of ideas involving kid's cash that you may not have thought of. For example, have you considered rewarding your kids' ability to save by matching their savings occasionally? 38 percent of parents do, according the DoughMain study. And do you encourage your children to give some of their savings to charity? The survey says 30 percent of us do that.You may or may not be into starting an account for your child yet, but DoughMain has other suggestions to help your children be better savers. They say taking them to a bank to see how deposits work, and helping them set-up a savings plan that aids them in achieving specific purchasing goals are helpful.
Personally, I also think it's a nice idea to encourage your kids not to spend it all at once, but to keep cash in reserve for the future. After all, even an eight-year-old is eventually going to want extra money for dates, right?
---David MurphyRead more Parenting Perspective blogs by visiting the Parenting Channel on 6abc.com.