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Question of the Month

Question of the Month is yet another effort by the debtcc team to enhance the community knowledge bank. It’s a monthly contest and every month a challenging question will be thrown before the members for responses. The best answer will be chosen collectively at the end of the month by the debtcc members and the admin panel of the site. The winner of this contest will receive a handsome reward of a $50. The purpose behind this idea is to encourage the members to share their real life experiences in dealing with the financial challenges.
Though different financial issues are being discussed across the debtcc board, but it doesn’t leave much scope to the members to share their personal experiences. Here is the place where it can be done, and also that the new members can get the innovative ideas to deal with their debts along with the conventional ones.

Latest Question

Question 12: How would you induce the idea of saving in your children?

Consumerism has dug a great hole in our pockets. We can't help spending on the lovely items in the shopping malls. There's no doubt that we encourage spending habits in our children. We'd like you to share your opinion on how to develop saving habits in children.

Winner Post

Trophy iconAnswer 1: I've done this with my grandson. I tell him everyone has to work to make money to buy food, clothing, pay bills etc. He earns $1 for taking out our trash weekly and $5 for mowing the lawn. He saves it in a box on his bureau. He currently has $80.00 saved.
I work at a retail store where I get a discount. If theres something he needs, I tell him we will get it when its on sale because hell spend less. He experienced this first hand when he wanted to buy a sports jersey. The jerseys original price was $25.00 - it was on sale for $12.50 and I had an extra coupon for 15% off plus my employee discount. He ended up paying less than $10 for a $25 jersey.
I constantly teach him the value of saving and buying on sale, and that he cant have everything he sees/wants. In years past when we went to the Jersey shore for vacation, we would stop for breakfast on the way down. This year I asked him if he wanted to stop and he said, no - lets save the money so we can go out to dinner instead.
He even points out things on sale to me. I think Im helping to raise a very aware young man!

Answer Posted by | aubrey

The other answers worth mentioning are:

Answer 2: of the most valuable lessons that I think that I taught my daughter is that life does not revolve around the almighty dollar. I have from the beginning spent quality time with her, so spending is not a real big issue with her. I think that if you get it started right from the beginning, you can save from NOT starting the bad habit of unnecessary spending. Put a value on time.
If you have to spend then show your child how to put money saving plans in place at a young age. Have them help you clip the coupons, add them up and show them how much you save. Show them the value of a sale and how much you can save. Most of all keep them informed and involved. My daughter loves Ebay, we save a ton there.
Start young, dont put the value to the dollar and invest time not money into your children.

Answer Posted by | fedupinpa

Answer 3:I setup a johnny appleseed account in my 2 year olds name. every month my wife takes her with her 10 - 40 dollars (depending on what we can afford) and makes a deposit with her. This is how we are showing her how to put aside money and when she is older and has a job I will show her how to setup a budget and track out going expenses and incoming money in a check register and on her computer.


Answer Posted by | Justin Pulley

Answer 4:I was recently introduced to what I think is a wonderful idea for teaching children the importance and value of saving money. Heres how it works:
Children are given an allowance of the parents choosing. A good starting point is to give $1 for every year of age. In my example, Ill use a 10 year old child.
Every Friday, the child receives a $10 allowance. The parents will set up 3 jars labeled "Keep," "Save" and "Donate." The child is taught to put $7, $2, and $1 into each of the jars respectively. So, the child keeps $7 dollars, saves $2 dollars, and donates $1 (20% savings, 10% charity, 70% keep) each week.
This gets your child into the habit of saving (and at a 20% rate) early in life. As a bonus, it introduces the value of charitable giving, budgeting, and planning.

Answer Posted by | OhioGal1

Answer 5:We set up interest-bearing checking accounts for our twins (the interest offered on checking was almost 4% higher than savings). They earn allowance, and household chore money (and find coins on the ground) and can choose (must be their choice) to deposit it into the account (they actually go up to the teller and I guide them through the transaction, I dont do it for them). I then show them online the interest ("Free Money") they are earning each month. This makes them very excited, since they are in 2nd grade and are learning the value of the coins, I can show them, "See, you earned one quarter and one dime this month, FREE, just for having your money in the credit union instead of spending it on something you wouldnt be playing with anymore anyway."
When they want to make a purchase, they have to think about it first (a "cooling-off" period). If they still want that item at the end of the week, they use their debit card (I walk them through this, too) to make the purchase and then we go to the credit union website and I show how their total balance dropped. (You guessed it--sadness). You would be very surprised how very few purchases have made it to the 1-week deadline. In the past 6 months, only one purchase decision for each of them, each under $10. Most they have forgotten about by the next day!
They are very proud of their account balances, and especially of their "free" money earned (their accounts currently enjoy a 4.01% return interest rate).
This is an excellent way to SHOW children how putting money into a savings (or checking with interest) account can earn additional "Free" money on top of what they put in, which makes them want to put in as much as possible.
The most difficult part of this is at the beginning, before they have a balance capable of bringing a noticeable dividend, you have to encourage them to wait for the reward, but once it starts growing, it becomes infectious to them to save rather than spend. Our girl twin says she wants to save it until she is an adult and buy a house (Actually possible).

Answer Posted by | TwinMom

Answer 6:Hello, We can start it by introducing the concepts of spending versus saving. While giving them allowances, give denominations through which they can save some amount. For instance, if you are giving them $20, give them 20 2 dollar bills. In this way they can save some money and understand the concept of saving. In fact, you can introduce your children to credit unions or banks and make them open savings accounts. Whenever possible, take your children out to shop. It is a nice way to make them understand the value of money.
This is my answer. Thanks.

Answer Posted by |gunz.ijjistaff

Answer 7:I would like to introduce the idea of savings to my children in the same way that I have started to do it myself. That you save what you dont see. For example.... if their "allowance" is say $10 a month (or whatever) 10% of that is automatically placed into long term savings for them. (Granted I am only at 2% but it is a work in progress).

Answer Posted by |tyleeash

Answer 8:For my daughter, I would offer to help her. I would tell her that if she saved for something she wanted instead of wasting her money her mother or myself would match what she saved and if she deposited it, she could have even more money with interest earned from the bank. Each time she put more money in the bank, we would also put money in a seperate account for her.

Answer Posted by |Matthew Lawson

Answer 9:As a young father, when my children get a little older and have things that they want, but not neccessarily need,they will work for the money. (Help mommy clean, or daddy wash the car) I think that drills in the appreciation of having your own things at an early age, so when they grow up and are wanting cars, name brand clothes, expensive shoes..etc., they will already have that skill and appreciation drilled into them. Thats the way I was raised and I wouldnt raise my children any other way. I believe children should appreciate what they have and if they work for it and start at an early age, they will learn to save their money and they can have anything they want. These days, you cant live if youre going from paycheck to paycheck, if they have the skill and mindset to save their money, they will be prepared to face life after school.

Answer Posted by |Joseph Apple

Answer 10:When my kids were small I gave them a choice - you can have your allowance on Monday and it will be $5.00.
But if you wait until Friday to get it I will add .50 (interest) each day and it will be $7.50.
If you wait until the following Monday - a full week, I still added .50 a day but then I added a $2.00 bonus.
One loved the idea and went for it every time. To this day he has more money in the bank than any of the rest of the family!

Answer Posted by |Patches

Answer 11:I have been trying to show my children that if they spend their money on gum & instant gratification items, they dont have enough to earn what they really want to do - a movie that they can watch over and over or the trip to Disney. We put money that we would use in the gumball machine or on a happy meal into a bank with the Disney characters on it for a visual reminder of why we are saving.

Answer Posted by |Kristen Baumia

Answer 12:The kids and I have vacation can where we put money in it through out the year and then use it for vacation. I also make them save at least two dollars out of their allowance every week so that they can save up for something they really want to buy later. This shows them that if you save you can have the things you want.

Answer Posted by |Germaine

Answer 13:I would open a savings account for them and deposit an initial $100 in the account. I would then tell them that I will give them $5 a week with the option of putting the money in their account. I would show them a simple spreadsheet how much money they could save until their 18th birthday. Then I would tell them that if they reached a specific amount, I would add $1000 to their account on their 18th birthday.

Answer Posted by |rrmag

Answer 14:Make it Fun!
Give them the book "Rich Dad, Poor Dad" then get them into a discussion on some of the topics.
Start with the big picture.
Get them to vision being debt free.
Get them talking about needs and wants!
Introduce the concept of time frames.
Talk about the rule of 72, how long does it take to double an investment.
Challenge them to do more research
Make your self available to talk again.
Make it fun!

Answer Posted by |Anthony Mitchell

Answer 15:my son collects circles (coins) and Rectangles (dollar bills) from people at random (grandparents, aunt and uncle) for holidays and birthdays. I let him go in to put the money in the bank himself, he loves it cause he gets a sucker for letting them hold his money! I tell him he can use it when he needs something for himself.

Answer Posted by |apickle

Answer 16:The way I encouraged saving for my grandson, was to tell him that every time he deposited money in his savings account, I would match the amount. This of course was an account that he could not withdraw from. This has really turned him into a saver. A word of caution though. You need to set an age to stop at, or when he gets an after school job, he can break you. Ha ha!

Answer Posted by | behil

Answer 17:Parents often look for clever ways to impart valuable knowledge on their children. Personally though, I believe the best way to teach a child something is with honestly and realism.
I come from an old-school Italian family in New York. I have one brother and three cousins, of which I am the oldest. Since all of us were little, my grandfather has had us working around the house doing chores.
We have mowed the lawn, cleaned gutters, washed dishes, done laundry, laid heavy stepping stones, cleaned the pool, and MANY other various chores which would take up most of this post. As we did each of these jobs, my grandfather was basically a gigantic pain in the butt. He would watch almost every step(especially for new jobs) and complain about anything that wasnt absolutely perfect. Typically by the time youre done working for my grandfather, you are completely worn out mentally and physically.
Whenever we completed these jobs though, he basically paid us WELL, especially for kids. The pay was always better than the small allowance I got from my mother. Growing up, each cousin knew that if he needed some cash, he could work for my grandfather at the house. Yes, the work would be grueling, but the pay would be good.
My brother, cousins, and I have always held steady jobs and had great work ethic. None of us holds a credit card. None of us has any serious debts. My grandfather instilled this lesson in us at a very early age: Work hard, do a great job, and the money will be there. When you earn and manage your money from a young age, doing so with an adult salary eventually is a piece of cake.

Answer Posted by | Devious_T

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