Teaching kids how to save
Parents would like their children to become responsible with money. Here are some things you can do to teach them about saving.
One way to encourage them to save is to give them a goal. Ideally this is to save for something that they really want and can be done in a short amount of time, like a CD or DVD rather than an iPod. This is a faster way to show them saving doesn’t have to take a long time.
Having kids save for their own purchases is a great way to teach them that putting aside small amounts of money now can pay off in even bigger rewards in the future – the iPod is the best example here. Sometimes this can curb their desire for something not really needed, but an impulse.
This method may also benefit in shopping skills, when it it their money they may look for the best prices.
As an incentive you could match their savings. This is the first lesson in interest earned on money saved. As they get older and wiser you can expand their financial education with the concept of compound interest. Get out the calculator, find out how much they have to spend now and putting in the interest earned rates, they can see how their money will grow.
One smart mother took the $500 her 11 year-old son earned mowing laws and opened a Roth IRA. The overview here is with an annual average return of 7%, that $500 without any added monies would be worth nearly $25,000 when he’s ready to retire. That would be a wise investment for any child.
There is also another way to determine how your money would double. It works like this; divide the number 72 by the interest rate you’re earning on your savings, and the answer will be the number of years it will take your money to double.
For example, if your money is earning 2% in a bank account, your money will double in 36 years. Seeing these numbers an the length of time is a way to interest your child in other methods of investments like stocks, Treasury bonds and CDs.
Now, if you had a parent wise enough to put some money away for you and it has been forgotten about there is good news. Banks must turn dormant accounts over to the state as unclaimed property. To help you look for your unclaimed money go to www.CashUnclaimed.com and do a free money search. This company was founded with the consumer in mind. Making the search simple by requesting one entry of your name to find money in all state and federal accounts. Also variables of your name will be searched. For example if your name is Robert, the search will include Rob, Bob, Robbie, etc. You have nothing to lose and considering that 9 out of 10 Americans have unclaimed assets, your odds are good that you have something to claim.
