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Five Tips for Kids on Piggy Bank Basics

Dr. Robert L. Lawson

The first opportunity to learn good money management skills is from a parent but it is hard with the increased holiday marketing. A child is never too young to learn and if a parent can set a good example it can leave a favorable, time-honored impression. If you try starting this holiday season, it will only help you (and your wallet) and your child (and their piggy bank).

When I was a child, I learned something about the value of money through the art of coin collecting from my aunt. I lived with her from the time I was nine days old. Early on, around the age of ten, I became fascinated with old coins and learned important facts about the value and worth of money. 

It was an idea that caught on early in my life and I eventually made coin collecting a bit of a hobby. It was fun, enjoyable and fascinating to collect Indian Head pennies, Lincoln Head pennies, Standing Liberty halves, Mercury dimes, Kennedy halves, Morgan silver dollars and other types of coins. For quite some time, I had in my possession the oldest Lincoln Head Penny ever made.  It was dated 1909.

Collecting old coins helped to instill in me the value of saving and I felt proud. It gave me a sense of self-satisfaction to amass several hundred dollars of old coins and silver certificate dollars in my formative years of growth.

When someone wanted to barter or trade, if I had two of the same coins and could spare one, a good deal was always in the making. I had quite a collection of coins up until mid adulthood when someone got into my cedar chest at the foot of my bed and stole my coin collection.

I learned a very valuable lesson from that experience. I learned never to become too attached to material things. It is very important for children to develop the habit of saving money at an early age. It will serve them well later in life. If you help your children to develop this habit, they can potentially be more economically savvy in their later years. 

If they should happen to lose what they have saved, Oscar Wilde has a masterful way of helping us to move beyond our bitterness and anger at such a mishap and tells us to keep going in the face of adversity. Here are his powerful words. “Ordinary riches can be stolen; real riches cannot. In your soul are infinitely precious things that cannot be taken from you.” That saying helped me in more ways than one and I hope it and the “Five Tips for Kids on Piggy Bank Basics” below helps you and your child too. 

  1. Help Kids Develop an Appreciation For the Value of Money

This one is a biggie. Until kids realize that money is more difficult to make than it is to spend, they will continue to think that it merely grows on trees. To drive home the point that it doesn’t come from a tree but out of your pocket, fight the urge to replace immediately something the child has lost because of his/her irresponsibility. For example, if he takes an expensive iPod to school and loses it or it gets stolen, it is better for the child to earn the money it requires to replace the item. Respect for money should increase the second time around.

  1. Dollars Don’t Go Far: Understand a Want Versus a Need 

When a child works, earns an allowance or is provided money, he can learn quickly that it is easier to spend it then it is to earn it. Here, it’s a matter of decision making. How bad does the child want the item? It literally comes down to wants versus needs. It’s important here to explain the difference between the two to the child. Children who get this point early in life are far better money managers when it comes to making future decisions.

  1. Help Your Child Develop a Savings Habit

What a wonderful idea this is. It’s pretty exciting when little Susie or Johnny sees something he /she wants and actually has the money saved to purchase it. It gives the child a sense of empowerment knowing that he accomplished this over a period of time on his own. Having acquired the ability to set money aside for a given item makes it so much easier for the child to do it a second time.

  1. Teaching Your Child to Give

This too is a noble gesture. Children see most everything that Mom and Dad do. They are very observant. If Mom and Dad put something in the collection plate at church, it’s good to help them to take a portion of their own money and do the same. This helps them to understand that it’s not all just about what they can get out of life but about what they can give. Helping children to develop a sense of generosity goes a long way towards helping our society understand not only the value of money but the value of others, our most important commodity.

  1. Teach How to Spend Wisely

Help your child to realize that just because he has money doesn’t mean that he needs to spend it all in one place at one time. Helping your child to learn the appropriate way in which to allocate those dollars is a major accomplishment.

Perhaps he can spend 60 – 70 % of it and put the rest of it in the bank or invest a small portion of it so it can grow for him. Our society is very good at teaching people how to work for money but much less emphasis is placed on helping kids to understand how they can make their money work for them. What an amazing lesson for a child this could be!

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