Turn your kids into super-savers: six tips for parents

Here are six tips for teaching your children to 'power save' and make the most of their money – now and in the future.

3. Show them how compound interest works

Cheryl Ravelo/Reuters/File
A worker counts dollar bills being exchanged inside a money changer in Manila in August 2011. Ramsey says setting up a savings account for children can teach them about the importance of compound interest.

You can set up a savings account instead of jars for the kids’ longer-term goals, and they will learn about the power of compounding interest – which looks like magic to them!

I started Lydia, my oldest daughter, on a 25-cent allowance. When her long-term jar got full, we set up her savings account. When her first statement arrived, showing she had earned 21 cents interest, her eyes lit up.

“How did that happen?” she wanted to know.

“Isn’t it amazing?” I asked. “All this time while you have been sleeping and eating and playing, your money has been just sitting there growing. And they gave you almost a whole quarter for it.” My daughter couldn’t believe it. Now every month, she can’t wait until the bank statement comes. She wants to see how much she earned while she was having fun.

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Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

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