Novel ways to teach kids about saving money

By Justin Boyle

I had just turned 8 years old when my mother took me to our neighborhood bank branch to open my first savings account. I had $20 in birthday money from my aunts and uncles and was about to learn valuable lessons about putting money away for the future.

But to hear my mother tell it, the only thing at the bank I wanted lessons about was the coffee machine. I walked out of there remembering my first taste of French roast much more vividly than my first taste of financial propriety.

Now, don't get me wrong. The old-fashioned "open a normal savings account with a friendly banker" approach might work for some kids. If you want to take a more creative direction though -- or if your kids are also at risk of becoming writers, who care more about coffee than practically anything -- here are a few tricks you can try.

Piggy banks 2.0

Maybe it's time we admitted to ourselves that the piggy bank has its drawbacks as a learning tool. The process of making even medium-sized deposits can be a chore, and there's no real way to check your balance without breaking and entering -- not to mention that it's possibly the worst option on the market as far as savings account interest rates are concerned.

A home-based savings primer can still be a good idea for younger kids though. Here are some ways you can update it to take the pig out of the equation:

• Use glass jars -- one for you and one for them. Not only can this help them keep track of how much they've saved, the family togetherness factor can also incentivize them to make deposits.
• Set up a cartoon balance chart and let them fill it in as they add to their savings. Easy abstract visualizations can help them understand the savings concept and discourage impulse withdrawals.
• Get some envelopes or little paper boxes and use a separate one for each savings goal. The idea of saving up for something can often make more sense to kids than just socking money away for later.

And remember, no matter how you choose to handle their home savings account, it's almost certain that you'll have to be ready to combat their occasional desire to take all the money out and spend it. Enforcing a 24-hour cool-down period before allowing withdrawals can help your kids manage these impulses.

Money-saving apps for kids

It's rare to find a kid these days who doesn't love playing with mobile devices, so how better to get them interested in saving than to turn it into a multimedia experience? Here are a few apps you can try to introduce them to fiscal responsibility:

• Kids Money is a calculator that lets kids plug in their allowance and any gift amounts to find out how long they'll have to save for a list of items.
• Savings Spree is an educational app that shows kids the power of saving, spending wisely and investing for the long term.
• KidsBank helps track individual kids' savings with the added benefit of letting you credit their accounts for doing jobs around the house.
• My Make it Count is a simple and free app kids can use to keep track of their savings, their goals and their financial habits.

These are only a few of the available options -- check around the various app marketplaces to see if one of the others available reaches out and grabs you. There are Web-based apps, too, which are usually free to use and may be better options for families who only have home computers.

Taking it to the bank

Although they may not yet know the difference between a high-interest savings account and an ordinary one, kids may want to graduate to a grown-up savings account as they get older. Check with your local bank branch or credit union to see if they offer specialized accounts for kids looking to dip their toe in the waters of adult banking.

Ally Bank and other Web-based institutions also offer custodial online savings accounts for kids, which can be a better option in some cases. There's no fascinating coffee machine sitting in the lobby of a virtual bank branch, after all.