Teach Children to Save

By: The Farmers Bank

The American Bankers Association says that savvy savings can start at any age. That makes it our responsibility as adults to teach our children about money.

How early should we start lessons on the value of money and savings? The ABA says as soon as a child starts learning to count. What a better way to learn about counting than with shiny new pennies (don’t let them eat them or stick in their ears!). As the child gets older, help your child split up any money he or she earns, receives or even finds. Show them how to divide their money using the 10% – 30% – 30% – 30% system. Find clear containers/jars and label as follows:

  • 10% Charity – Take 10% off the top to share
  • 30% Quick Cash – Use this 30% for instant gratification
  • 30% Medium-term Savings – Save this 30% for 1 – 6 months to purchase something special
  • 30% Long-term Savings – Use this 30% for important things in the future, like college

Using the jars will make savings visible and real. After all, everyone enjoys watching their money grow.

Although it is the responsibility of parents to teach the importance of savings, it is also the responsibility of each of us to do whatever we can to teach financial literacy. The State of Tennessee has in the past few years passed legislation to advance financial literacy in schools, which is bringing much needed education to young people. We have a long way to go to be one of the top states in the Union in financial literacy. According to WalletHub.com Tennessee ranks 34th overall in financial literacy. Only a few years ago our state was ranked in the forties so we are moving in the right direction in education.

The Farmers Bank has developed a financial literacy programs for all ages. Our employees go into the schools bringing our knowledge and experiences to the students. We have taught everything from identifying coins and values in the lower grades to college loans, credit cards and managing a checking account to the upper grades.

One of the programs we participate in is Teach Children to Save sponsored by the American Bankers Association and the Tennessee Bankers Association. Our bank has been awarded the state award for the last eight years out of nine for having more employees read books about money and savings to more first grade students than any other bank in the state of Tennessee. We are proud of this honor and recognition from the TBA but more than that, when we lay our heads down at night we sleep knowing we are doing our part in teaching our future adults to be more financially responsible. We can’t stop what we are doing. We, too, want to see visible and real results.

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