Money Moments of Truth Blog Series: Week 1
Teaching Kids the Value of Savings
By Scott Sims | Senior Vice President, Regional Sales Manager
Welcome to the first week of our five-week “Money Moments of Truth” blog series. Sandy Spring Bank is celebrating Financial Literacy Month this April by taking you on a journey through various stages in life, and highlighting a few healthy financial behaviors along the way. No matter your age, there are always things that you can do to improve your financial outlook. Our own bank employees will share their stories each week, and show how their “Money Moment of Truth” helped guide them toward a better financial future.
When I was young, my dad always told me that “money will burn a hole in your pocket.” When you have cash in your hand, you will want to spend it. This meant that even at a young age, I needed to be purposeful when managing money—with less spending and more savings.
My Money Moment of Truth occurred when I realized that in order to have enough money to buy the things I wanted, I had to be deliberate about saving my money. Instead of spending all of my allowance or paychecks from my first job as a kid, I began to establish a savings plan, and this early behavior became the foundation for many of my financial practices as I transitioned into a teen and young adult.
As a parent and a banker, every day I see the value and importance of following the philosophy of ‘paying yourself first.’ This concept revolves around the idea that nothing is more important than saving for your future. To pay yourself first, you simply need to have a set dollar amount, or percentage of your weekly earnings, that goes directly into your savings. Once that is set aside, then you pay your necessary expenses; and whatever is left can be your spending money.
Just as parents work to instill healthy habits in their kids—from eating well to studying—encouraging healthy savings habits should be no exception. There are important things that parents can help their kids save for as they get older, such as a first car, college tuition, or even a down payment. Parents should also help their kids understand that things like a “rainy day fund” and a retirement account are all important aspects of life that require extensive savings. Although these milestones may not be top of mind now, one day your kids will see how important they are to ensuring a prosperous and bright future.
Even if your children are still young and haven’t quite figured out how money works, start the conversation now. You can help them learn by comparing different expenses, like making an impulse buy of a candy bar that only costs a dollar, or waiting to put that dollar towards a new game system. You can also lead by example by opening a savings account or a 529 plan in their name, and talking with them about saving for their future. No matter your child’s age, use everyday purchases and events to help them discover the importance of saving.
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