Think back to when you were a child. It is likely that you had a piggy bank of sorts. But when you were leaving home, whether for post secondary education or to join the work force, how much did you have in your savings account? For most, not a lot and a lot less than what you were given over all those years. In general, it is just too easy for parents to allow the use of money in piggy banks. But what would happen if your kid’s piggy bank was a place for money to go in but not come out? How much money will your kids have when they are ready to leave home?
Are You Serious About Piggy Banks
According to the dictionary, a piggy bank is a container for saving money in, especially one shaped like a pig, with a slit in the top through which coins are dropped. This small well known pig shaped device can have a huge impact.
Most parents dabble in teaching their kids about finance, but rarely go all the way. Meaning, parents know that it is a great idea to teach their kids to save. As such, most parents will start a piggy bank. This is typically a jar of sorts or some type of decorative holder for coins. Parents will typically put in the first dollars. Over time, in a sporadic fashion only loose change or an occasional bill goes into the piggy bank. What is for sure, is that parents typically do not have a consistent plan of putting money into their kid’s piggy bank.
Even when kids grow to an age where they are receiving allowances, parents tend to not enforce actively putting money into a savings account. It is not unusual for children to raid their bank accounts for frivolous spending needs. It is also of no surprise that our children use the entirety of their allowances without saving. This leads to an unsurprising situation when our children leave home. When they leave home, it is likely that they will have very little to nothing in their savings account. What would have happen if we begin to take the piggy bank seriously?
Enforce The Piggy Bank
A piggy bank is essentially a very local savings account. It does not earn interest (similar to your local brick and mortar bank). It is a place for your kid to put extra funds or funds marked for saving. Here is the big thing, like any other savings account, money that goes into a piggy bank should not be for frivolous spending. Money in a piggy bank is for the future.
The only time money in a piggy bank should be remove is for transfer to another bank account or in specific times of needs where withdrawal is a must. For your kids, that should be it.
The Piggy Bank – Money Goes In But Does Not Come Out
How much money did you receive for your children when they were born? How much money have you received for your child’s birthday or other holidays? Now think, how much money your child would have had in a savings account if you had saved the amounts in a piggy bank and/or transfer the funds to a high yield saving account? When your child is ready to leave your home, how much money would they have had? Could that have been a valuable head start or a security blanket for them venturing into the real world? But it is not too late to change.
The fact is, if we treat our kid’s piggy bank as a place where money goes in and not come out, both we and them would be in a better place. It would teach parents and children to not only live within their means, but to also save and spend on only what is necessary.
So many times, we have kids who want unimportant things. But how often do we have the conversation with them about delayed gratification? The fad of today will past and your money in your savings account will continue to grow for the future. How often do we tell our kids about the power of having control of their future by attaining financial independence? Maybe parents should practice this more. By having/building a financial safety net, your kids can take risk and do what they want to do in life. Share with your child that financial freedom takes sacrifice. In the end, if done correctly, a piggy bank and your conversations around it can teach all this and more.
Conclusion
Think back to when you were a child. It is likely that you had a piggy bank of sorts. But when you were leaving home, whether for post secondary education or to join the work force, how much did you have in your savings account? I can bet for most, not a lot at all. In general, it is just too easy for parents to allow the use of money in piggy banks. But what would happen if the piggy bank was a place for money to go in but not come out? By teaching your children about money and using the piggy bank to do so, you can provide your children with the tools for a financially secure future.
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