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In addition, when should I open a savings account at our bank for my kids; and give them accountability over it?

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We started with our son about age 5 or so. He was at the time old enough to understand that you buy stuff using money.

We don't give allowance, rather we made up a job chart that he can put checks on, and give him a small amount for each job that he does. This is meant to enforce the idea of 'work and get paid, don't work don't get paid', and associate the concept of work and money.

We also try to teach him the concept of giving, spending and saving, by having envelopes with those words on them and dividing the 'commission' money between them. The give money is used for a charitable organization. The save money is used in a couple of ways - either to save for a large item that he wants, or to put into a savings account. The spend it money he is free to buy whatever he wants with.

We got this plan from the Dave Ramsey Show, and it has been really good so far. The best thing about it is that when we are at the store and he sees something he wants, we can ask 'did you bring your money?' This keeps the begging down to a minimum and also helps us teach him to make a list of stuff he wants and can save for.

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    +1 but from a hyper worried father I wonder about reinforcing the idea that work should only be done for money. I don't want my kid to think money is free, but I don't want her to not work hard just because she doesn't want any money.
    – MrChrister
    Jan 7, 2010 at 22:23
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    Yeah. We do have some jobs that he just does because he is part of the family. And we still have to remind him to do the chores even though he does get paid. As for not working because she doesn't want any money, I guess I'd say that eventually she will want money or something that she should be buying with money she has earned and that is a pretty strong (and good emotionally) motivation to work. But yes there is a lot more to teaching kids how to work than just the money angle and it isn't the only thing we focus on.
    – harmanjd
    Jan 7, 2010 at 23:03
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My daughter is two, and she has a piggy bank that regularly dines on my pocket change. When that bank is worth $100 or so I will make it a regular high yield savings account. Then I will either setup a regular $10/month transfer into it, or something depending on what we can afford.

My plan is then to offer my kid an allowance when she can understand the concept of money. My clever idea is I will offer her a savings plan with the Bank of Daddy. If she lets me keep her allowance for the week, I will give her double the amount plus a percentage the next week. If she does it she will soon see the magic of saving money and how banks pay your for the privilege.

I don't know when I will give her access to the savings account with actual cash. I will show it to her, and review it with her so she can track her money, but I need to know that she has some restraint before I open the gates to her.

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    LOVE this idea. Smiled when I read "bank of Daddy":-)
    – Nat_Rea
    Dec 31, 2009 at 2:39
  • Good idea! I like it!
    – gyurisc
    Jan 12, 2010 at 16:11
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It's never too early, but age 3 is when we started a piggy bank. Age 4 is when we opened a bank account. When you go shopping with your children, discuss what items cost (such as bread, milk, books, etc.) Start teaching them that everything has a value...then relate it to how much they have saved.

Kids need to learn 3 basic things from their parents: how to save/invest, how to spend wisely, how to share/donate

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