Parenting: Summer Job Saving

What's better than earning money over the summer? David Murphy says, "Saving it!"
What's better than earning money over the summer? David Murphy says, "Saving it!"
August 2, 2012 7:10:05 AM PDT
If your older kids are able to find a summer job, financial industry professionals say it's an excellent season for parents to teach important lessons about saving.

Ken Damato, founder and CEO of DoughMain.com, a website dedicated to helping parents teach their children about money, says saving can become a lifelong habit if kids are taught the practice early in life.

I've written before about the savings tactics suggested by Damato and DoughMain. In this blog, I'm sharing some of the site's earlier tips and some new ones. It's the idea that now is the time kids may be making money and they should be thinking about preserving at least some of it.

Among the tips: think about creating a family match plan where you agree to match a certain portion of your kids' summer earnings (if they agree to chuck the money into a bank account). Discuss with them how money saved during the summer can be doled-out gradually, making for fun experiences and purchases throughout the year.

My personal idea is to have them agree to leave any matched funds in the bank for six months or a year. With this way, you'll also familiarize your children with the sort of company-match retirement plan they may be offered if their careers steer them into the corporate world.

Another idea is to use a child's allowance as a teaching tool. Divide allowance into three separate accounts, one for spending, one for saving, and one for giving. Your child will only be allowed to spend from the spending account and must use the rest for savings or charity.

Young children can also be encouraged to seek-out earning opportunities with neighbors or relatives, doing odd jobs.

No matter what their age, once the money starts rolling-in, have your kids budget about how much they think they'll be earning during the summer. Also establish a savings goal for how much they think they can still have in the bank (or piggy bank) by summer's end.

This Yahoo finance article gives you to a synopsis of these and other basic tips from DoughMain.

The DoughMain website also has financial games that kids can play to teach them about money, as well as even more saving tips and tools. The site is free and basically independent.

It is supported by several large financial institutions who are likely on board because the more young people they can encourage to save, the more future depositors they'll likely garner. However since saving is a generally accepted financial strategy, and banks are the obvious way most people successfully accomplish that, I figure it's a fairly innocuous relationship.

---David Murphy

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