Kids and Money: Early Earnersby Sherry Holetzky | More from this Blogger 12 Jun 2006 04:21 AM A previous article, Teaching Kids to Save Money, described simple ways to encourage children to save more. A Families.com member posted a comment after that article, and later sent me a private message with more information about a website she co-founded, called Early Earners (thanks Ami). The site is a great teaching tool that will help parents explain the importance of saving money and how starting early will prepare them for the future. It also shows how Americans are spending beyond their means and how to avoid doing so. There are even calculators to show us how quickly saving --and spending-- adds up. On the main page, just type in the amount you want to save each day over how many years, and it will instantly calculate a total. You might just be surprised. On the Kids and Teens page, the calculator shows how limiting purchases can help you save money. For example, it shows how purchasing two sodas or otherwise spending $1.50 each day will add up to over $35,000 in 20 years (at an APY of 4.50%). There are other options in the drop down menu as well as an advanced calculator. The Kids and Teens page also explains terms like APY or Annual Percentage Yield in layman's terms so kids and teens can understand. It's also informative for parents, since most of don't have a background in finance. For example, it shows that children's savings accounts don't earn as much interest as other types of accounts. Even though they are easier to open and require less of a balance, it's a big trade off due to the minimal amount of interest that can be earned. Early Earners offers a lot of useful information for the entire family, so check it out sometime. You will be glad you did. Learn more about Sherry Holetzky  Sherry Holetzky is a work at home mom and freelance writer. Married to her best friend, Sherry and her husband are raising their family in a quiet rural setting in the beautiful Ozark Mountains. Relevantfrugal tags User Comments hab (8) 13 Jul 2006 08:57 PMHi Sherry While I agree there's a lot to like about the early earners site, I think a few important fundamentals are missing when it comes to the message for kids. 1) There's almost a single-minded focus on saving, without addressing the benefit of saving other than "having more money". I know with my four kids, I would quickly lose their interest when talking only about "fun stuff to give up" (eg pizza) with the only payoff being conceptual (savings over time) and perhaps fear reduction ("if you're not scared yet"). I have to admit - I'm quite skeptical that many kids have read the site. And if they did, I doubt they encouraged Mom and Dad to rush out and get them a savings account. 2) I really try to teach my kids that earning/spending/saving is all about making choices - sometimes between two products today - sometimes between something today and something in the future. And it's ok to sometimes make the choice to spend today! Llife's about balance. And it's best they start to learn these lessons as kids when the price of a mistake is pretty low. 3) I found that using real bank accounts just didn't help teach the kids much. It was pretty sterile, not interactive enough and interest payments were too small and infrequent to matter to them. I suspect that's what many kids find when they open an account, so it doesn't really teach them much. To help our kids learn about responsible earning/spending/saving, my wife and I developed a more elaborate system with several "virtual" bank accounts (recreation, gifts, sharing, clothing, long term savings, etc), "virtual" checks they could print and sign when they wanted to withdraw money, really simple tracking of expenses and income (eg allowance, gifts) so they could see where they got their money and where they spent it. We also created Responsibilities Checklists that enabled them to not only feel proud about earning their allowance by sharing the family tasks but also earn bonuses for special achievements (eg finishing a school project early). The system has been outstanding, but involved a lot of effort when we did it manually. So we created a website to dramatically simplify as well as significantly improve the process. In case you're interested, it's in public beta right now, at www.activeallowance.com Community Tags allowance, Early Earners, kids and money, prepare kids for the future, teaching kids to save money Discuss this article
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