Cartoon figure can teach kids -- and adults -- about value of saving
He's only an animated figure in a children's television show, but Wayne turned out to be a pretty good role model for our 5-year-old grandson, Aidan.
Wayne, a character in the Disney Channel's ``Higglytown Heroes," wins the top prize of 10 shiny new coins at the town's science fair. He wants to buy a super deluxe toaster, but it costs 15 coins. Figuring his Uncle Leno will give him money for his birthday, Wayne looks for a ``good and safe" place for his 10 coins until he can save the rest.
He finds it with the help of a banker, who is the ``hero" (each episode has one). Not only will the coins be safe but ``you can watch your money grow with interest that we add just so," the banker tells Wayne. ``If you put away a penny a day, soon you'll have more saved than you ever thought."
That's a message many adults don't get, but Aidan did.
``It was right after that show that Aidan started saying he wanted his money to grow," Kyle, our son-in-law, told my wife, Georgina, and me. Aidan had become fond of his ``Tigger Bank," a piggy bank in the shape of the character in ``Winnie the Pooh," but it was time to take the next step. ``I told him he would have to open a bank account because his money wouldn't grow in the Tigger Bank," Kyle said. ``I explained that when he puts his money in an account at a bank, the bank gives him little bits of free money called interest. I told him it is important to leave the money in the account for a long time to really see it grow.
Aidan opened his first savings account with the $2.93 accumulated in his Tigger Bank. The bank, where Kyle and our daughter, Veronica, keep their money, won't charge any fees as long as Aidan brings his balance up to $100 in one year. With allowances and gifts, he'll manage. Now Aidan says happily that his money ``will grow in the special bank." ``Your grandchild understands that money can grow with something called interest. That's a powerful concept for a 5-year-old," said Carl George, of the American Institute of Certified Public Accountants (www.360financialliteracy.org). Aidan ``will learn how savings accounts work and will enjoy trips to the bank to make deposits. Even at age 5 it will feel like `real money,' " George said.
Adults, take notice. In our plastic and electronic society, where we routinely spend hundreds of dollars by swiping credit cards or clicking on computer screens, it is easy to lose sight of where our money goes.
Perhaps that helps explain why the US savings rate has turned ``negative," and millions are saddled with credit card debt. (Collectively, we spend more than we make, and 43 percent of households spend $1.25 for every $1 they make, George said.)
``One of the ways to chip away at the financial literacy problem in our country is to get to the kids early and let them develop positive behaviors and attitudes," George said. Among his tips:
Help your child understand how interest compounds by showing him or her how much "free money" is earned.
Offer to match whatever your child saves toward a long-term goal.
Let your child take a few dollars out of the account occasionally. Otherwise, young children in particular may quickly lose interest in saving.
Let your child set his or her own goals (within reason).
Encourage your child to divide his or her money up. For instance, your child might want to save some of it toward a long-term goal, share some with a charity, and spend some right away.
Write down each goal and the amount that must be saved each day, week, or month to reach it. This will help your child learn the difference between short-term and long-term goals.
Tape a picture of an item your child wants to a goal chart, bank, or jar. This helps a young child make the connection between setting a goal and saving for it.
Humberto Cruz is a columnist for the South Florida Sun-Sentinel. 