Saving Money: Teaching Children How To Save

3 Steps to Begin Saving

3 Steps to Begin Saving
ABA Education Foundation

You’ve just won the lottery and have your choice of two grand prizes:  $1,000 an hour for 24 hours for 30 days or a penny doubled every day for 30 days.  Which would you pick?  If you understand the power of compound interest, you’d choose the penny.  The first prize would total $720,000, but the second prize would total a whopping $5,368,709.12!  How is that possible? 

Invest a little for a long time and you end up with a lot.  Compound interest is just that simple, but to get there you have to choose saving over spending.  It’s important that you learn how to save when you’re young because that’s when you form habits that last a lifetime.  Just like learning to ride a bike, many skills are easier to master when you’re young than when you’re an adult.  Get started by setting a budget, starting a savings account and making deposits regularly.  Then sit back and watch your money grow!


1. Set a budget: A budget is a plan that helps you keep track of the money that you earn and the money that you spend.  Take a look at our Beginner Budgeting Tips to learn more.
2. Start a Saving Account: Many banks offer kids’ saving accounts.  These accounts have no minimum balance and charge no fees.  Your parents or a trusted adult can help you open an account at your local bank branch.  Your bank doesn’t offer a kids’ account?  Ask them to start one!
3. Make Deposits Regularly: Once you have an account, make sure you use it!  The bank is the safest place for your money, safer than your piggy bank.  Plus, your money will earn interest.  Interest is the money a bank pays depositors, like you, for using your money. 


Setting A Budget

Beginner Budgeting for Every Age

Beginner Budgeting for Every Age
ABA Education Foundation


The best way to reach your saving goal is to start with a budget.  A budget helps you keep track of the money you have coming in – your allowance or Birthday money – and the money you have going out, including spending, saving and possibly donating.  A good way to learn budgeting is to divide your money into four clear jars labeled:  Sharing, Spending, Short-term Saving and Long-term Saving.  The following guidelines will help you decide how much to put in each jar.


1. Sharing jar:  deposit 10 percent of your income, or $1 for every $10. Are you concerned about helping children or animals, protecting the environment or supporting a local food bank?  Choose a cause that you’re interested in and donate regularly.  You’ll feel good and the charity will benefit from your generosity!
2. Spending jar:  deposit 30 percent of your income, or $3 for every $10.This money can be used at any time for small purchases, like a baseball or a CD.  Ask your parents for guidelines on how you can spend this money, and then make your own decisions!
3. Short-term Saving:  deposit 30 percent of your income, or $3 for every $10. You may need to save several months for larger purchases, such as a video game or an IPod.  This jar will help you save for some cool stuff!
4. Long-term Saving:  deposit 30 percent of your income, or $3 for every $10. This is where you’ll save for the future.  Someday you’ll want to go to college or buy a car.  These expenses require a lot of planning and saving!

Once your money has started to add up, ask a parent or trusted adult to help you open a savings account at a bank. [Savings accounts, even with the currently low interest rates are a good idea. Ask about any fees that may be attached to savings account balance amounts!!!]


The bank will make sure that your money is safe, and they’ll even pay you while it’s there.

[Meta Bank held the money a grandmother had put into an account for her grandchild…. Otherwise, this has usually been true, but no one was regulating how METABANK did business. The money should have been safe for that family, but it was META BANK who practiced just the opposite from what we believe to be true about banks.]


Your local banker can help you open an account and learn more about other ways to save. [ The key word here is your “LOCAL” banker, that person you can go in to talk to at any time….Bank at a locally owned and operated bank.]

Race to Save
It’s true, kid savers are more  likely to attend college. Bankers get it, and this year they are trying to open more youth savings accounts than ever. Stop by your local branch and open a youth savings account today.

Find a Race to Save Bank in Iowa:


Bankers Trust Company                     Des Moines

Cresco Bank & Trust Company                     Cresco

Decorah Bank & Trust Company                 Decorah

First American Bank                                        Clive

First Security Bank & Trust Company          Charles City

Frontier Bank                                                  Rock Rapids

Green Belt Bank & Trust                             Iowa Falls

Iowa State Bank                                              Hull

Iowa State Savings Bank                           Creston

Northwest Bank                                       Estherville

Northwest Bank                                      Milford

Northwest Bank                                     Okoboji

Page County State Bank                      Clarinda

Titonka Savings Bank                           Titonka

TS Bank                                                     Treynor

U.S. Bank N.A.                                    New Sharon

However please be sure that one of the banks above is not an affiliate of META BANK!!!!

 Teach Your Children to Save:

Become a Young Saver
It’s never too early to start saving for the future—saving is one of the best ways to make your dreams come true.

Whether you are planning an outing to the local amusement park or a once in a lifetime trip, set a savings goal to get every member of the family involved. As a group, figure out how much the whole trip will cost. Include admission fees, travel expenses, food, souvenirs, etc. Then talk about ways everyone can contribute so you’ll reach your goal.

Discussing and practicing ways to save through wise spending choices (e.g. shopping for generic brands at the grocery, using coupons, or renting a video instead of going out to the movies) and ways youngsters can earn money to spend during the trip (e.g. taking care of a neighbor’s pet or raking leaves along your street) can reinforce the goal.  When spending decisions come up — such as “I want that new toy!” — your family can discuss how important an item is when compared to the family’s savings goal.

If you’d like to keep a chart of your family’s goal, use the Family Savings Goal Worksheet below. The secret to future financial success is simple: Start now. Whether encouraging your child to save up for a special purchase, saving for your child’s education, planning for a family outing, or building a retirement nest egg, saving something regularly is critical.

Experience is a great teacher. What you do matters, so let the kids and teens in your life see how you’re saving.

Make a point of telling them that you always pay yourself first (if you do).

Make sure the kids you care about are putting away at least a small part of the money they receive from you, be it gift, allowance, spare change or money from chores.


It’s a habit that will last a lifetime if it’s encouraged early and often. 

Make Savings a Family Affair 


Create a Savings Plan

Know what you have coming in, and what must go out for essentials.

Pay your bills on time.

Pay off your credit card balances every month.

Family Savings Goal Worksheet 

Small change adds up to big dreams. One way to actively reinforce the habit of saving is to involve your children in the family’s 

saving and budgeting. Get every member involved in the discussion and decision-making process, and write down your goal.

Goal: ____________________________ Amount Needed: ___________________ Target Date:  ___________________

(e.g. a family purchase or event)

Cost-cutting Measures Family Donations Anticipated Savings Actual Amount Saved

(coupons, savings from (spare change put in a jar, comparison shopping) then deposited in a locally owned bank in your neighborhood


Week/Month 1 ________________ + ________________ + ________________ $  ________________

Week/Month 2 ________________ + ________________ + ________________ $  ________________

Week/Month 3 ________________ + ________________ + ________________ $  ________________

Week/Month 4 ________________ + ________________ + ________________ $  ________________

Week/Month 5 ________________ + ________________ + ________________ $  ________________

(Add in more savings lines as needed, here)

Add Weekly Anticipated Savings to determine Total Anticipated Savings = $ ________________


                                                                                                                                               Grand Total Saved   $  ______________

Have you met your savings goal in the “Anticipated Savings” column?

If yes, congratulations!

If no, consider ways to expand your cost-cutting measures and/or increase family member donations.

Then re-enter the new figures in the appropriate spaces above.

Good luck with your family savings goal!

Adapted from Parent Resources in the Teach Children to Saveprogram.

© Digital Vision

© ABAEducation Foundation, Washington, D.C.


[This is such a sweet message about teaching children to save.

It assumes that a family has a reasonable amount of income so that every last penny doesn’t have to be spent to buy food, to pay rent and to buy clothing.

Those families who live from pay check to paycheck live a whole different reality from that which is featured as a suggestion above….

…The suggestion above is excellent and a very sweet idea, but it will work for families who aren’t already sitting on the brink of homelessness..]


ABA’s Top 10 Personal Finance Tips for College Students

Top 10 Personal Finance Tips for College Students
Personal Finance 101

They understand GPAs and test scores but do they understand their credit score or the value of saving?  The ABA Education Foundation’s top 10 tips are designed to give students an edge on mastering personal finance.

1. You are in charge.  You are responsible for your finances and you should act accordingly by creating a realistic budget or plan and sticking to it.[ Keep it that way. Don’t use debit cards. Absolutely don’t use PREPAID BANK CARDS]
2. Watch Spending. You control your money, determining how you spend or save it.  Pace spending and increase saving by cutting unnecessary expenses like eating out or shopping so that your money can last throughout the semester. [ This is a budget. If you have $100 available to you on the first day of the month and it needs to last for the whole month…. plan out your month. Set aside some extra for unexpected expenses that may come up, just in case…. like saving for a “rainy day”]
3. Use Credit Wisely. Understand the responsibilities and benefits of credit.  How you handle your credit in college could affect you well after graduation.  Shop around for a card that best suits your needs. [ Better yet bank at a bank you already know if possible. Scam online for customer satisfaction, not at that bank’s own website but using independent customer’s reports.]
4. Get a Bank Account. Banks are more than money in a vault. They offer valuable services that students can benefit from like check cashing, debit cards [ I do not recommend DEBIT CARDS], online banking, balance alerts, personal loans, direct deposit, financial education and some offer identity theft protection.
5. Lookout for Money. There’s a lot of money available for students, you just have to look for it. Apply for scholarships and look for student discounts. [Apply for grants, not loans. Scholarships should not be a loan in disguise.]
6. New is Out.  Consider buying used books or ordering them online.  Buying books can become expensive and often used books are in as good of shape as new ones.
7. Entertain on a Budget. Limit your hanging out fund.  There are lots of fun activities to keep you busy in college and most are free to students.  Use your meal plan or sample new recipes instead of eating out. [ Usually most college kids are in the same boat money wise… unless they are on a collision course toward destruction anyway, but you should avoid those kinds who want you to run amuck with them… they aren’t your friend( s) they are your enablers!!!]
8. Be particular when it comes to money. Don’t just trust anyone with your money.  Be skeptical of classmates, friends or salespeople that have ideas for your money. [ Please note that during freshman orientation various banking establishments will endeavor to entice your student to get a DEBIT CARD or a PREPAID CARD, telling them that it is safer and more secure that paying using cash money…. Parents, who are afraid for their child who will be away from home for the first time are also approached with these PREPAID CARDS/DEBIT CARDS and those parents want to keep their college student safe and secure, but banks like METABANK are out to take advantage of everyone and anyone’s achilles tendon. That is how they get you to opt in so they can begin their scam.]
9. Save.  Things happen, and it’s important that you are financially prepared when your car or computer breaks down or when you have to buy that unexpected bus ticket home.  No matter how small the amount you should start putting some money away immediately. [This is a good idea, but the debit card and the prepaid bank cards will not help you to save no matter what the publicity may say.]
10. Ask. This is a learning experience, so if you need help, ask.  Your parents or your banker are a good place to start and remember the sooner the better. [ Please note that many if not most bankers really wish to provide a real service, but then there are banks like METABANK that enjoy spreading misery everywhere to anyone they can get….. ask several people, not just one source, and never bank at META BANK.]



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