Piggy Banks and Bank Accounts

Do you remember the excitement you felt as a child when your mom presented you with a brand new piggy bank? Although there are a variety of piggy banks for kids today, parting with the money saved may be difficult. However, when the appropriate time arrives to empty the piggy bank and open a bank account, a satisfactory explanation is required.

Here’s an example: Let’s suppose your child’s piggy bank is filled to the brim. Now is a great time to take your child and the piggy bank to the bank and open a savings account. For older children especially, taking them to a bank and having them talk to an account manager makes them feel grown up and responsible. Your child will be able to ask questions; the account manager can explain how savings accounts operate, how interest is paid, and how deposits are made.

Your child will be shown how to withdraw money if necessary, and this will give her a sense of ownership. There are banks that have savings accounts set up just for kids, and they can learn a great deal by enrolling in a program to learn not only the value of money, but how saving money for the future is an important step for them.

Although your child may not want to put all the money from the piggy bank into the bank, you can compromise by setting aside a few dollars so they can build on it for the next deposit. You can also decide on a percentage that will go into the bank on a weekly basis, depending upon if you give them an allowance.

Certainly, any money they obtain as birthday or holiday gifts can be easily deposited into the bank. Also, it’s a good idea to limit the withdrawal to a certain figure. For example: If your child opened a bank account with $100.00, and future deposits have been made, ensure that any withdrawals do not deplete the $100.00. If the child wishes to purchase something special, as long as there is $100.00 remaining after the withdrawal, you may allow the child to withdraw money for the item.

Another thing you can do to get your child to part with the money in the piggy bank and open a savings account is to use this incentive: Let’s assume the money saved in the piggy bank comes to $45.00. You can add $5.00 to make it an even $50.00. This is a gift to your child for taking this giant step. For kids, this is a big deal!

Kids are funny when it comes to money. When they open a bank account and just keep putting money in and never taking it out, they tend to lose interest in saving because they are not reaping any rewards.

If you find that your child has grown tired of putting money into the piggy bank, take her to the bank and have her withdraw a few dollars to buy something special. In this way, when she looks at her bank book and notices an increase in savings, you can have an account manager explain how interest is attained.
This will encourage your child to continue putting coins into the bank. Eventually, you can find a large jar that will hold coins and dollar bills. Then you will witness, first hand, how well your child will develop the good habit of saving.