Teach Your Kids to Save

Teach Your Kids to Save

Introducing your child when he's young to the idea of socking away cash will make him more likely to do so throughout his life, says Lori Mackey, founder of Prosperity4Kids.

First Open an account in your baby's name. Rather than choosing a passbook savings account (which earns almost no interest) or a money-market fund (most have initial-deposit minimums), try a high-yield account like the Kids Savings Account from ING Direct, which offers an annual interest rate of 0.8 percent (eight times the national average) with no monthly fees or minimum balances. Have your child deposit birthday money as well as 10 to 20 percent of his allowance each week and watch it grow.

Then Once he has saved $100, open a custodial account at a site like sharebuilder.com, which lets your child buy shares of stocks and, with your supervision, monitor the returns as often as he wants. He might like to own a bit of his favorite toy company, game maker, or theme park.




Posted by: Georgie



Credit: Parents Magazine