North Dakota State University
NDSU Extension Service

Kids & Money

a newsletter for young people


Saving Money

You may get money on your birthday, for holidays, washing windows, mowing the lawn, for an allowance. When you get money you can do three things: you can spend it, share it or save it.

Often it is fun to spend money right away. Sometimes you want to buy something that costs more than the amount of money you have. Then you can plan to save your money until you have enough to make your purchase.

To save means to keep for future use. You can save your money in a piggy bank. You can also deposit money in a savings account at a bank or savings and loan. If you do not have a savings account ask your mom or dad for help in opening one up.

While your money is in a savings account, interest is added to it. Interest is money that the bank pays you for keeping money in their bank. Interest is added to your savings account as it is earned. The bank may loan your money to someone else, but you will always to be able to get your money when you need it.

When, for example, you save enough money to make your special purchase, you will need to go to the bank. You can withdraw your money from the bank when you need it, but first get your parents' permission. Try not to make too many withdrawals. You can use a special book called a passbook to record your deposits and withdrawals.

Try setting goals and saving money to reach those goals. It is a habit that you can learn and use throughout your lifetime.

Money and Your Kids

a newsletter for parents


Understanding Savings

Like adults, children use money in three major ways: they spend it, share it or save it. This newsletter will explore saving.

Saving money, or postponing spending, is essential since it enables people to meet needs they can meet in no other way. Saving money with specific goals in mind is highly recommended. Unfortunately, the principle of goal-oriented saving does not mean much to young children, since their goals usually are not well defined and they are not inclined to delay their gratification. Preteens may save for clothing, gifts and special ventures, but most elementary school students neither understand nor care about long-term savings. In time they are likely to do so, if parents encourage them to save money according to their abilities and interests at each stage of development.

Piggy banks can introduce children to the idea of saving money. There's nothing wrong with forming the habit of dropping pennies into a piggy bank, without thinking about what they will be used for. But savings takes on a whole new importance when you have a goal in mind. Saving for a goal can inspire children to take control of their spending habits and to plan for future needs.

When your children have gained some experience in handling money, it is probably time for them to open a savings account. Choosing a bank or other savings institution can teach them a lot about the world of money. Involving your child in making deposits and watching the balance grow may help make savings more meaningful. The idea of interest - making your money "grow" - is an important one.

Helping children learn to save for specific things can be a valuable experience. They will learn that if they don't spend their money on many small purchases, they can afford more expensive things later. When children begin setting goals, be sure you guide them but do not set goals for them. It may be helpful to use visual aids like pictures to remind preteens of their goals.

Tips for Parents

Brought to you by the NDSU Extension Service.
See your county extension agent for more money management information and other family economics programs.

March 1996

NDSU Extension Service, North Dakota State University of Agriculture and Applied Science, and U.S. Department of Agriculture cooperating. Sharon D. Anderson, Director, Fargo, North Dakota. Distributed in furtherance of the Acts of Congress of May 8 and June 30, 1914. We offer our programs and facilities to all persons regardless of race, color, national origin, religion, sex, disability, age, Vietnam era veterans status, or sexual orientation; and are an equal opportunity employer.
This publication will be made available in alternative format to people with disabilities upon request (701) 231-7881.

North Dakota State University
NDSU Extension Service