Baby Diapers & Bank Deposits: Teaching your kids early about the value of money

I learned from my parents at an early age the importance of working hard and saving money. At the age of 12, I had a paper route making about $30 a week. The cost of the newspaper per week was $2.75, but with my big tip neighbors, they rounded it up to a whopping $3! Certainly hard to get rich at 25 cents a pop. I also took jobs at Macy’s, ShopRite, a linen company called the Cloth Connection, a local camp, jewelry store, and a catering hall, all before going off to college. My dad still talks about how I was one of the few high school kids that went from working at a day camp in the sun all day to coming home, showering, putting on a suit, and working at the boy’s department at Macy’s from 6 to 10. 

I saved the money and put it into a local bank and I got my first bank book at an early age. Back then getting 4-5% on your savings account was the norm and I noticed my account increasing in value fairly quickly. That money served me well as I went off to college and had some spending money, starting my relationship with a bank known as Columbia First. Ironically, 30 years later, I am still a customer of that bank (checking, savings, and credit card). (now owned by Capital One) My bank understood the importance of gaining customer loyalty at an early age.

Years later when I started a family, I wanted to give my kids an early start. I opened up a custodian account at the local M&T Bank (who names a bank – “empty bank?” by the way?) They were having a great promotion… for the first six months after you opened up an account, you had to come in once a month and deposit five dollars and the bank would match the $5, for 6 months. A total of $30 of free money. It was like a little 401k matching program for kids and we took full advantage. I would bring my two year old son (and later his brother) into the bank to deposit the $5. Of course, at that time, he was more interested in the free lollipops and the toys they had in the kid’s area. But we built up a relationship with the bank employees, started a 529 account there, asked lots of questions, and it became our saturday morning tradition, with a follow up trip to the local diner. We had this tradition for many years for both our kids.

Over the years, we have done many things to give our kids good financial habits. For example, we gave our kids an allowance based on doing chores around the house. (setting the table, taking out the trash, etc). Most of that money went right into their bank account at M&T. Before going to the bank, we would ask them to count their money – change and all – and if they got the number exactly right, we would give them an extra cash bonus to deposit. When TD Bank moved into our neighborhood, they had this great coin machine. (no more having to roll up the coins into those paper wrappers!) Guess – how much change you have within $1 and they would give you an extra dollar. It was fun and entertaining for little kids. Plus our kids quickly developed a trick – they would count their change ahead of time and win the extra dollar every time. 

Later on when my kids got older, they asked for a video game system called the Wii. My wife and I agreed that we would let them use their money to buy it together – with one caveat. They had to go back to M&T Bank, withdraw the cash needed and pay for the Wii with that money. (one of the few times we recommend not using a credit card to purchase something!) I’ll never forget the faces when my kids, 6 and 9, counted and then handed over $200 to a Toys R Us clerk. They saw first hand, their hard earned money, handed over to a store in exchange for a good. It was important for them to see actual money changing hands even though we typically recommend using a credit card for the sweet rewards. 

It is still true today as it was 40 years ago, that good financial habits can start early and lead to a lifetime of financial security. While my kids will likely not be delivering newspapers or working at a supermarket like their father, they are working hard in other ways that will pay off. (this website being one of them) For us non-tech savvy parents, let’s continue to find ways to connect and coach our kids – their financial future depends on it.