Little Kids and Money

[msmama]

My son is 2 1/2.

He doesn't understand money yet (heck, he barely gets numbers, lol). And luckily he doesn't seem to have "the gimmies" yet. He's perfectly fine with the toys having to stay at the store.

My Grandparents sent him $20 for Xmas.

In the past when he's gotten money for Birthday or Xmas I've just used it to take him out to lunch or something. Or, admit it, buy groceries or something.

What do you do when people give your small children money?

(We don't have a separate savings acct for him because we'd rather just keep all the $ togther to get more iterest.)

 

[brymolmom]

When my kids were that little I would likely have used it for something for THEM....but something more along the line of a need rather than a want. So if he needs new boots or something - I would use it for that (especially just after Xmas when the last thing they need is another toy).

But my kids generally get gifts, not cash from relatives. So it didn't happen often. Once in awhile, i would 'save it' for their college fund. And then when we finally opened one - I put in a big chunk (but didn't put their $ specficially in there).

Now that they're bigger (7 and 8) I think it is important to open their own account, even without the interest accumulating together. So when ds8 had his First Communion last year and got quite a bit of cash - I let him keep some of it in his piggy bank and we opened an account for him for the rest. So every once in awhile I'll show him how much he has in there. And next time he gets a chunk of cash - I will have him save some and keep some (or spend some).

 

[hffmnheidi]

You could always put it in a CD and let it grow over the years. My nephew(9 now) has several CDs already worth over 10,000 because his parents would take the money that he got from grandparents and other family members and put it away. He's already got a great college/car fund.

 

[figment3258]

My DD's are 8 and 4 and we let them handle their money. We encourage them to save it but if the save up for something they really want that's fine too. My oldest just saved 100$ to buy a new American girl. Its great when they set a goal and achieve it!

 

[Swimalie]

My son is 5. He has a piggy bank where we have put the money that he has been given over the years (yes, it's quite an amount now). Now that he is getting older, we will open an account in his name so he can start earning interest and seeing how his money can grow with him. But also, when he is given money, we let him spend a few dollars of it on himself. For Halloween my mom gave him $15. He was begging to spend some of it so I let him spend $7. The rest went in to his piggy bank.

 

[mamaLori05]

My kids are 3 and 5 and each have a college acct and piggy banks. I put any money the receive in their piggy banks, and when the piggy banks get too full (or the amount gets a little high) I deposit it into their college accts. If we have a Disney trip coming up (thier own spending money, not the entire trip or anything), or are trying to save up for something big for them I use the money in the piggy bank for that.

 

[Marionnette]

My son is 2 1/2.

He doesn't understand money yet (heck, he barely gets numbers, lol). And luckily he doesn't seem to have "the gimmies" yet. He's perfectly fine with the toys having to stay at the store.

My Grandparents sent him $20 for Xmas.

In the past when he's gotten money for Birthday or Xmas I've just used it to take him out to lunch or something. Or, admit it, buy groceries or something.

What do you do when people give your small children money?

(We don't have a separate savings acct for him because we'd rather just keep all the $ togther to get more iterest.)

Older kids here. But when they were little and they got money for there birthdays or holidays we alway let them spend a small amount (like $5) and the rest went into there savings accounts. ING has savings accounts with better interest than most other banks and they have no minimums. I set up accounts for each of them. They have always known that the money was there for them to spend on a long term goal. My middle child bought a dirt bike when he had saved enough. The oldest used some of her savings to go to Japan this past summer. The youngest hasnt spent any of his savings yet. He wants to see what happens with college plans first.

 

[dougsmom98]

We invest our kids' money. Especially when they were that young. Now, they get the concept of money, so we allow them to keep 1/3 of what they get for fun (in their piggy bank until they know what they want), and the rest gets invested or put in the bank.

 

[RRL38]

When my son was that age we put all the money he got into a college fund account. He's now 13 and when he gets money we let him make the decision of what to do with the majority of it.

 

[Luv Bunnies]

I opened savings accounts for our boys several years ago. They're joint accounts in my name and theirs so I can manage them. They get $500 a year from my parents for Christmas for college and it goes in their accounts. We opened 529 college savings accounts earlier this year and put the bulk of their money in those. I still keep several hundred in their savings since it's more easily accessible. If they really need something (like my high schooler will be needing a laptop for school pretty soon), we can pull money from their savings accounts. For smaller amounts (birthday money, lawn mowing money, etc.), they can buy pretty much whatever they want (within reason, of course). They usually save for video games or Pokemon cards for the younger one.

My DH and I are serious savers. Our miserly habits have gotten us through a 19-month period of him being unemployed! We're hoping our kids learn the value of not spending every dollar that comes their way.

 

[MickeyManiac]

My DFIL has always given money to the kids for Christmas and usually around $50. We opened DS savings account when he was 2 and would always deposit his gift money in that account. This is not his college fund, it's his "fun" account. Now DS is 16 and that account is still growing. As he's gotten older and harder to buy for more people give him money. He did take some money out to help buy himself a car this past summer, but he really has left it alone. It should come in handy for college in next year.

 

[santa's surpriz]

Here is a part of presentation I did for a group of elementary parents. Maybe this will help give you some ideas how to teach your son to be sensible with money.

Teaching your Kids to Save and Be Wise Spenders

Children learn a lot from the parents-Be an example of a responsible money manager by paying bills on time, being a conscience spender, and an active saver. Remember what your financial concerns and priorities were at the ages of your children. Let your children help you determine how to teach them. Use their questions to develop lessons.


Age 3-Elementary - Make it real, and keep the emotions out of it. Children repeat everything!
• As soon as your kids notice money, it is time teach them about it.
• Model proper behavior-if you are short on cash and use a credit card, follow up with something about the credit card coming at the end of the month and you will have to pay for it then.
• Kids will learn to manage their own money and need to learn choices
• Some schools as early as 1st grade kids learn economics-what producers and consumers are, a need vs. a want, and differences between goods and services.
• Bring your child to the bank-tell what you are doing and why.
• Needs vs. wants-talk to your children on shopping trips. At the grocery store- Milk is needed for strong bones. Candy or ice cream is a want.
• Divide and Conquer-have multiple jars for spending, short-term, long-term savings. Decide appropriate ratios to divide their allowances, birthday money, etc.
• Gift stock certificates to kid-oriented companies such as Toysrus, Disney, Ben & Jerry’s. They will take pride in their ownership rights plus some companies even have shareholder meetings directed towards children.
• Setting, and sticking to, spending limits teaches a basic lesson: You can't have everything all the time and you can't necessarily get what you want when you want it. This teaches financial discipline and will encourage the child to comparison shop and keep an eye out for sales.
• Credit Lessons: Get a library card. Make sure they pay the fines for late dues if they fail to get the book back to you to return.

 

[MSSANDRA]

I think that it is his money and should be for him. At this age however he has no clue. If he NEEDS anything, new snow boots ect, get those for him, if there is a toy or book he did not get and you know he would like it, get that for him. Other-wise get him someway to save money, either a piggy bank at home or an account. It will not be long before he does know what money is and then he gets some say but for now you get to choose.

 

[lovetheduck]

As soon as our DDs were born, we opened accounts in their names. All the $ they got for birthdays, holidays, etc. was put away. Now that they are 6 and 9, it's added up to thousands of dollars. One day when they need it, it will be available to them.

 

[QVCshopper]

I have two kids, 4 and 6. They each have a savings account at TD Bank. It's a kids' account with no fees. We opened it with $25 of our own money, which the bank matched. The kids each get $10 for the bank's summer reading program every year. All other money in the account has been found by us on the ground, vending machines, etc. They each have $140 at the moment; whenever their piggy banks get fairly full, we got to the bank with the change and put it in their accounts, evenly divided, of course.

For larger amounts, like your $20, we put it into a 529 plan, which we contribute to monthly. However, they seldom get money--less than $50/year, if that. Hope that helps.

 

[barbmouse]

I would start his own bank account unless there was an item he really needed. I wish I would have done this with my dks. They have decent bank accts but if I had started earlier and contributed Christmas and bday money instead of buying toys, I just think it would have been a wiser use of the $. Just my two cents worth. BTW my kids are 14 and 17 now.

 

[Tinkmom]

As soon as our DDs were born, we opened accounts in their names. All the $ they got for birthdays, holidays, etc. was put away. Now that they are 6 and 9, it's added up to thousands of dollars. One day when they need it, it will be available to them.

This is what we did. It is the kids' money, not ours. (I don't think I could take that and spend it on general family expenses. Maybe if we were starving or about to be evicted.)

It does add up and they will really appreciate it when they are older.

 

[mom2t]

My son has a savings account which one day will go toward a car. He received an inheritance from my grandfather's death and we bought stock recently in a power company for college education. He received money $100 from my parents at Christmas and a 3 small gifts - we will buy more stock. He has a special box that he has been saving money given by us to reward good behavior at school - he is ADHD - and my parents occasionally. He is saving for his trip to DW in 3 weeks. He received $20 in money from family members - we will let him spend that in Disney with his other money. He has learned to save for big ticket items - He bought a WEII this past summer all from money he saved - He is 8 now. Whe he gets money he hands it to me to put up for him.

 

[KristinU]

My DD's are 8 and 4 and we let them handle their money. We encourage them to save it but if the save up for something they really want that's fine too. My oldest just saved 100$ to buy a new American girl. Its great when they set a goal and achieve it!

We do this too with DS, now almost 7. A friend passed along a Buzz Lightyear wallet from her DS when my DS was about 3, that's when we started having him tend to his own spending money. His wallet stays at home, so when the "I wants" happen at the store I can simply ask if he has his wallet with him (usually not) and tell him that we can go home and count how much is in his wallet and plan to come back another time for whatever it is...99% of the time we don't go back because he's forgotten, but that 1% of the time he is thrilled that he was able to buy his own item. We have a local independent hobby shop that is awesome and they publish 10% coupons every so often...over the past year he's really been understanding the value of that coupon and how it makes his money go farther.

He also has a Money Saving Pig bank that has sections for Spend, Save, Donate, and Invest. That's where all of his coins go, but it doesn't accomodate dollars very well. But as far as the $20 here and there gifts from relatives, we let him choose how to spend that and not invest or donate...unless he really wanted to, of course we wouldn't stop him!

Here is a part of presentation I did for a group of elementary parents. Maybe this will help give you some ideas how to teach your son to be sensible with money.

Teaching your Kids to Save and Be Wise Spenders

Children learn a lot from the parents-Be an example of a responsible money manager by paying bills on time, being a conscience spender, and an active saver. Remember what your financial concerns and priorities were at the ages of your children. Let your children help you determine how to teach them. Use their questions to develop lessons.


Age 3-Elementary - Make it real, and keep the emotions out of it. Children repeat everything!
• As soon as your kids notice money, it is time teach them about it.
• Model proper behavior-if you are short on cash and use a credit card, follow up with something about the credit card coming at the end of the month and you will have to pay for it then.
• Kids will learn to manage their own money and need to learn choices
• Some schools as early as 1st grade kids learn economics-what producers and consumers are, a need vs. a want, and differences between goods and services.
• Bring your child to the bank-tell what you are doing and why.
• Needs vs. wants-talk to your children on shopping trips. At the grocery store- Milk is needed for strong bones. Candy or ice cream is a want.
• Divide and Conquer-have multiple jars for spending, short-term, long-term savings. Decide appropriate ratios to divide their allowances, birthday money, etc.
• Gift stock certificates to kid-oriented companies such as Toysrus, Disney, Ben & Jerry’s. They will take pride in their ownership rights plus some companies even have shareholder meetings directed towards children.
• Setting, and sticking to, spending limits teaches a basic lesson: You can't have everything all the time and you can't necessarily get what you want when you want it. This teaches financial discipline and will encourage the child to comparison shop and keep an eye out for sales.
• Credit Lessons: Get a library card. Make sure they pay the fines for late dues if they fail to get the book back to you to return.

This is great stuff! I'm thinking we might want to re-think the gift money appropriation and have him think of some percentages for it.

 

[aprilgail2]

It is the kids' money, not ours. (I don't think I could take that and spend it on general family expenses. Maybe if we were starving or about to be evicted.)

It does add up and they will really appreciate it when they are older.

I agree- I hate to think that the checks I give to cousins kids are being spend on household expenses unless they are down and out starving!
What I did from the time my daughter was little- all the money she got for her Christening, birthdays, christmas etc went into a 529 college savings plan or her. Once she hit 8 ( I think it was 8 they could get the junior account in the bank but not positive on that age) then she would deposit all her money into the bank. Its her money not mine so she could do what she wanted with it- she does like to save it though and she recently took 225.00 out and bought herself an itouch. She got a bunch of checks for Christmas and is very intent on building her account back up to where it was so that will all go in the bank!