How Bankers Teach Their Kids to Save Money
Apr 25, 2023
Today, nearly 54% of teens have anxiety over money, and the gender gap in financial confidence appears as early as age 13.
Education is critical to reducing financial anxiety and giving kids a sense of control over the future. So, we asked the experts—our very own employees at Maspeth Federal Savings—how they teach their kids to save money. And one thing is clear: Parents—particularly mothers and grandmothers—are the most powerful influence on children’s financial habits.
The power of earning
One of the most common ways to teach kids about saving is to give them an allowance or pay them for doing chores. Such was the case for Teller Camila Gutierrez and Universal Banker Ashley Gunst. In addition to learning the value of money and how to manage it, an allowance helps kids create the habit of setting money aside on a regular basis.
“From my allowance, I took the singles and fives and put them into a money jar,” remembers Gunst.
Make it special
Many MFS employees have vivid memories of their families’ saving habits.
“My grandmother kept a cash stash in the freezer and would give me some money when no one else was around,” recalls Vice President & Community Affairs Director Jill Nicolois. “And I thought, hmm, someday I will save enough to have a stash in the freezer too!”
A fun piggy bank or special hiding spot helps children conceptualize saving and turns it into a ritual they find exciting.
“We had plastic bunny banks that we used to collect dollars until it added up to $300,” says Universal Banker Margaret Sweeney.
“When I was a child, I saw my mother open a cabinet and take out a metal box that had a lock on it,” says Vice President & Deposit Operations Director Victoria Grappone. “When she realized I was there, she said that her mother always told her to put half of her allowance away so that she could buy something she really wanted on her own and that she would appreciate it more. My mother always told me to do the same because it will make you independent and never have to rely on others. When I became a parent, I bought all three metal boxes with a lock and key and explained how my mother was able to buy a brand-new car with her metal box savings. My children looked forward to getting their allowance and going to their hiding spot, taking out their boxes, and putting some of their allowance away. All my kids continue to save as much as they can weekly.”
Set goals and celebrate progress
Kids save more when they have a specific goal in mind, like buying a car or going to prom. Encourage them to set a goal or turn saving into a challenge they have to complete by a certain date for an extra reward.
Celebrating progress drives motivation and successful habits. Aphorisms and visual tricks are great ways for kids to conceptualize and celebrate small wins.
“My grandmother always said, ‘Penny to a penny makes a dollar. Dollar to a dollar makes 10 dollars,’” recollects Branch Supervisor Sabina Daniszewski.
Many MFSers also remember watching their money add up visually.
“My parents converted my saved change into bills. This made me feel as though my efforts really added up,” says Nicolois.
Branch Manager Subrena Singh’s children store cash they earn from allowances and chores in glass mason jars.
“We chose glass so that they can see the money adding up,” says Singh. “Once their jars are filled, I bring it to the coin machine to redeem and they split it three ways evenly with a choice to either put it in their account or buy things they need.”
Open a savings account and teach “pay yourself first”
Once the appeal of a piggy bank wears off, take your child’s saving to the next level by opening a savings account, such as a Young Saver’s Club account.
“My mom brought me to MFS and opened my first savings account,” says Universal Banker Marzena Grodzki.
In addition to learning how to monitor a balance, bank accounts enable kids to learn a “pay yourself first” mindset like Teller Rebecca Ramkhelawan, whose mother taught her to set aside at least $200 every paycheck into savings.
Subrena Singh’s mother was also instrumental in her financial awareness growing up. “My mom would take half of my babysitting money and hold onto it from age 11. When I turned 16, she took me to the bank, and we opened my first CD,” says Singh. “I asked her, ‘Where did you get this?’ She replied, ‘Every time I took that babysitting money, I was putting it away for you so that you’d have your own account one day.’ My mom was the one who taught me how to save and got me my first banking job as a teller.”
Credit cards are for building, not buying
Adding your teen as an authorized user of your credit card is a great way to help them learn to build credit, pay bills, and practice spending within their means. Communicate that the purpose of a credit card is not to buy now, pay later but rather to build credit, which is essential to achieving life goals. Many adults never learn this concept and end up in debt.
Enforce a rule that your child can only use the card for things they can afford with cash on hand, which they must give to you so you can pay the bill every month. Better yet, open an MFS checking or savings account for them and have them pay the bill online themselves.
In addition to these tips, there are plenty of ways to teach kids how to save, including activity books and games. But no matter your approach, a financial education is one of the best gifts you can give your children.
The information herein is general/educational in nature and should not be considered financial advice. Consult a finance professional regarding your specific situation.