Introducing the 3 little piggy banks
It may be time to rethink that piggy bank perched on your child’s dresser. Experts say a piggy bank—or three of them—can help teach children as young as 5 or 6 the cornerstone of financial literacy: to save and manage money.
the first bank collects money for
These are the funds that children get to spend as soon as they want: pocket change for sweets, small toys, or apps for a parent's tablet or phone.
of kids’ money go toward spending.
Whatever percentage you decide,
what's important is that your child sticks to it.
Tip: Giving children an allowance made up of small denominations makes splitting it up easy, according to Consolidated Credit. If a child has to wait for change, a portion of it may never end up in the savings or giving banks.
the second bank collects money for
This is the cash children put toward a more expensive item. Some younger kids may find it helpful to write their goal down or paste a picture of the item near the bank as a constant reminder.
of kids' money be put into the savings pig.
Set a savings goal
Write it down
Tip: Some parents choose to pay interest, say 5 percent, on the funds in the savings bank. As kids see the interest accumulate, the trade-off between saving and spending is clearer, according to Threejars.com, a virtual piggy bank and educational website about saving money.
the third bank collects money for
When it comes to giving, kids tend to get excited about helping nearby students (for example, donating school supplies) or the environment (specifically, helping cute endangered animals), so consider letting your child help choose a cause.
of their money be put into the giving bank.
You can select a charity together so children understand where their money goes.
Tip: Need help choosing? Check out Charity Navigator, where you can search for highly rated organizations and your child can get excited about the charity’s work. For example, World Wildlife Fund allows kids to “adopt” an endangered animal, like a panda or tiger. DonorsChoose.org offers a searchable list of schools that need supplies.