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Monday 17th of August 2009
February 15, 2007

Is Saving For Children The Right Route

by Kathyrn Lang

It’s important to save money for the children. I’ve heard this since my husband and I first started having kids, and I recently read an article that was discussing the best ways to go about saving money for children.

The expert talked about the savings plans that are available, the tax options, and even the benefits to saving for children. As important as many people see this particular financial path, my husband and I are going about it from a different angle.

We aren’t saving for our children.

Instead of saving money for them, we are teaching them how to save their own money. There have been too many horror stories of people getting large sums of money only to blow it all and end up in debt. Giving our children a large savings – even to use for college – is not as important as teaching the true value of money.

At six, our children can earn an allowance. They get an allowance ($2) if the household chores get done. Every year, they get a raise of fifty cents. There are other things that the kids can do to earn money as well, but it’s never more than a few dollars.

From all the money they earn, ten percent goes to donations. We want them to learn the value of giving as much as the value of money. Sometimes they give the money to the church or their Sunday school class. Sometimes they find an organization they want to give to.

Then next slice goes to taxes. Twenty percent of all earned money goes into a house tax box. At the end of the quarter we vote as a family on how to spend the tax money. I don’t want my kids to enter the “real” world and be shocked by the amount of the real paycheck they receive. If they learn how the tax system works (even on such a basic level) then it will help them to be more responsible citizens in the future.

Now they get to save part of the money for long term. They put back at least ten percent of the gross earnings in this savings account. This is for a big purchase that they have their eyes on. At present, it’s horses. Not only do they have to save enough to buy the animals and the tack, but they also have to help with the expense of building a barn and fence.

The remaining monies are theirs to save or spend as they choose. Just before Christmas, they worked together to save enough money to buy dinner for my husband for his birthday. They bought the gift certificate with change, but it was all their money and they counted it out themselves.

My husband and I are contributing to the long term savings – some. And our goal is to have some money set aside that they can have for college or for after college. We know that teaching our children the value of the money will be more priceless for their lives in the long run.

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