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Cent$ible Students: To Piggy Bank or Not to Piggy Bank…That is the Question

August 6, 2013

Note From MonsterMortgage.ca

Recently, the children of one of our mortgage agents came home from school excited to share what they had learned at school about money.

The student followed up with their teachers and found that an organization called Cent$ible Students which teaches financial literacy had been at the school.

MonsterMortgage.ca met with Cent$ible Students and they agreed to share their teachings with our clients and for those who follow our blog and follow us on Twitter and Facebook. We hope that you, your family and friends will find this information useful and help you engage your children on the topic of money.

Let Us Know What You Think!

The Following is written by Jenni, Co-Founder of Cent$ible Students

Piggy Bank or Savings Account – Which is Better for Kids?

When a child is very young, it is exciting for them to shake their piggy bank and hear the coins rattling around inside. Or if you have a clear container, a child can see the level of coins rise as they add more and more to the jar. There is a sense of pride associated with saving and until they realize the potential for spending, many children are quite satisfied with the act itself. I (and many parents) wish this never changed!

For older children, from as early as 7 or 8 years old, saving accounts can be exciting too; however it takes a bit more effort on the part of the parent. Many parents set up bank accounts for our children at a very young age, but few parents actively include their children in the activity. Setting up a new account for your child can be an educational outing to visit the bank. Help your child prepare some questions and have them participate with you in speaking with the bank associate about what happens when you open up an account. It is also worth your while to shop around and compare options, as some youth accounts offer bonuses for setting up a new account; for example, some banks offer a one-time $25.00 initial deposit.

Most youth accounts still use passbooks, which can be explained to your child and used as an incentive to watch their money grow – not only as they put more in, but with the added interest they receive. (We explain interest as a little bonus that the bank gives you for keeping your money there. For older children, you can talk about how the bank uses this money to provide other clients with a loan for things like a car or house.)

So although the interest earned from a savings account is not very significant in the beginning, you can explain to your children that the money is safe and growing. This is in contrast to a piggy bank, where money can be tempting to spend, and no interest is accrued. A bank account is a pretty good deal and saving is a very important habit for your children to develop.

And finally, many students ask us what happens if someone robs the bank, what will happen to their money? You can assure them that the government will guarantee that their money is safe, up to $100,000. The Canada Deposit Insurance Company has a website that you can explore to learn more about how this works – http://www.cdic.ca/home/Pages/default.aspx

Watch for the next Cent$ible Students article on some other great ways to get your kids to save!

Happy Summer!

Cent$ible Students provide in-class workshops for students from Kindergarten to Grade 8. We help students to develop an understanding of money related issues, including budgeting, credit, banking and saving through stories, activities, online tools and games. Our curriculum complements and reinforces existing math curriculum requirements set by the Ministry of Education. It also helps teachers meet the new cross-curricular financial literacy requirements recently established by the Ministry for grades 4 to 12.