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Compass F inan ce
Piggy Bank Lessons
To begin helping children develop financial skills,
parents should discuss the basic ideas of spending,
saving, investing and donating. Consider these fun and
practical ways to illustrate the basics of instilling good
money management habits in kids:
1. When you save, money grows. This is an important
first message to help your child understand. After
dropping coins into the bank week after week, you can
visually point out how the amount has grown.
2. Savings plus interest equals even more money.
Photo By marc eggimann
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“It is not the creation of wealth
that is wrong, but the love of
money for its own sake.”
— Margaret Thatcher
28 Live cattle are the oldest form
of currency, dating all the
way back to 9,000 B.C. In fact,
the first coins were slabs of
bronze shaped to resemble
cattle. Interest is a reward or “thank you” that the bank pays
savers for holding their money. You can illustrate the
idea by adding a nickel to each dollar your child saves.
3. Start a four-bank system. Consider taking the
learning experience to the next level by expanding
to a model that includes: A spending bank for money
to be used soon; A savings bank for money to be used
later; An investing bank for money that will grow on
its own; and a bank for donating money to help others.
By keeping the money management lessons simple and
in the context of everyday activities, your kids can
reap the rewards of being money smart — a gift that
will pay dividends for years to come!
Chuck Downs is a Certified Financial
Planner with 20 years of experience. He is
the Managing Director for Northwestern
Mutual Wealth Management
Company. For a consultation, email
him at C.Downs@NMFN.com or call
305.373.3738. Green Buck
Before the days of paper money,
Americans traded animal
skins, including deer and elk
bucks, for goods and services,
resulting in the word “buck”
used to describe money.
According to recent official
estimates, there is about $825
in circulation for each person in
America. But that doesn’t mean
that every American has that
much in the bank!