Piggy Banks Encourage Financial Responsibility
The Benefits of Using Children's Banks to Teach Money Concepts
Feb 6, 2009
Just a glance through newspapers and business magazines reveals the sad fact that somewhere along the line, parents are failing to teach their children financial responsibility. While distressed adults are turning to financial counseling to learn how to better manage their money, high schools are beefing up their finance education curriculum. But what about young children? With parental guidance and the beloved piggy bank, even toddlers can begin to learn proper money management skills.
Encourage Responsible Money Handling
The cry of many a mom is "A place for everything, and everything in its place." These words of wisdom should be applied to children's nickels and dimes as well. When money is scattered about – a few dollars here, some coins there – children fail to understand how to physically handle money in a responsible manner. One of the most basic concepts piggy banks teach is that money should be kept in an appropriate place. Money is to be valued and cared for, and piggy banks help develop a respect of money.
Reduce Impulse Spending
A trip through the grocery or department store with kids can be frustrating for parents who are plagued with an outbreak of the "gimmee, gimmee's"- those cries from children who have spied something they think they simply must have. However, when children are diligently taught to save their money, parents have a simple cure for the often annoying behavior. "When we get home, you can check and see if you have saved enough money to buy that." This phrase places the responsibility of buying the item on the children rather than the parent.
To further discourage impulse buying, parents may institute a "Think About It" rule. Children may not purchase an item until they have thought about it for 24 hours. After 24 hours, the family can return to the store to buy the chosen item. However, if children change their minds during that stroll towards the selected item and suddenly want something different, the "Think About It" rule should be reinstated again. This will help children make wise purchases and develop a sense of control over spending impulses that will benefit them into their future. It gets children to stop and think, "Do I really want this item?"
Foster a Sense of Finance Control and Priority
Even deeper financial principals can be taught through the use of modern, compartmentalized piggy banks. One such bank is the Money Savvy Pig (see photo) which is a bank that features four separate money chambers labeled with "Save, Spend, Donate, Invest." This type of bank teaches children how money can and should be saved for different purposes.
Parents may opt to allow their child to choose how much money goes into which savings category, or they can begin to relate the 10-10-10-70 savings principal. This financial concept, that every dollar earned should be divided into 10% for charity, 10% for long term investment, 10% for savings, and 70% for daily expenses, is advocated by many financial planners. Instituting this practice will build a foundation of financial responsibility that will last far into their future.
Parents are a tremendous influence on their children's spending practices, both present and future habits. When parents accept the responsibility of effectively teaching their children to handle money, children will grow into financially responsible adults. Simple piggy banks relate practical cash concepts that have solid, life-long benefits.
References:
Pastor David Bennett, Ph.D. and Phyllis Bennett. "Practical Parenting Seminar." Grace Baptist Church, 353 River Road, Hudson, MA. January 30, 2009.
Money Savvy Generation. Money Savvy Pig. 2009
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