Personal finance: Help kids solidify a great saving habit

As a mom of two and product of the generation raised in a time where it was taboo to discuss finances, it’s always been a goal of mine to teach age appropriate, fiscal responsibility to my kids. One could argue it’s a hazard to the profession that I chose, but either way, we’ve done our best to instill the habit of saving early in our children’s lives.

What started with a traditional piggy bank and a lesson in budgeting when they received that Target gift card that was burning a hole in their pockets, has now turned into an experiment with the ever popular “Greenlight” kids debit card. I should mention that this is not a paid advertisement but an honest review with real life results.

When Greenlight first hit the market a few years ago, our oldest was 5 at the time. He has always been conscious of “his money” and curious what that could buy him on adventures of any kind where they sold kid-related goods. He would ask to enter the chip into the reader at the store, and always asked if he could pay for things himself. My husband and I decided that we would give this kid’s debit card a try and gifted it to him that Christmas with his very own wallet. With zero exaggeration, it was his favorite gift that year.

The card came with an app that a parent or guardian could control, and it also gave the ability to link your bank account to it. While it came with many features, we used it strictly to help him to deposit any money he received so he could watch it grow. He has a “spend” account and a “save” account. Any time he received money, we would deposit it to our checking account and transfer it to his. There was one catch; whatever money he received for a birthday, holiday, or just because Grandpa threw him 5 bucks, had to be split 50% between spend and save.

Any parent can imagine the first phrase was “that’s not fair” when it came time to deposit his first birthday loot since opening his account. But we fast forward two and a half years later, and he recently asked if we could put half of the quarter he found on the ground in his accounts.

What’s most interesting is that it has also caused him to stop and think when he does want something at the store. The deal is, if it is in his “spend” account, he can spend it on whatever (within reason) he would like. But this exercise has caused him to recognize the value of something above a typical impulse to buy just because he wants something.

The Greenlight card has become such a useful tool in our home that this Christmas our daughter, now also 5, received her own card and wallet for Christmas. While I am sure the battle over who will buy the sparkly shoes won’t ever go away, her older brother has helped us find a tool that aids in the parenting debates that come in a world full of consumerism that we hope continues to pay dividends in the future.

I would encourage you to ask your financial adviser what you need to be doing today for the future generations of your family. At CapWealth we believe next generation education should start early with age-appropriate lessons. Successfully preparing the next generation to receive your family’s wealth is about more than prudent investing or the right estate planning documents. It is about making sure money helps, not hinders, our children become responsible adults with fulfilling and productive lives. If your financial adviser isn’t talking to you about stewardship lessons for your children and grandchildren, give me a call.

Hillary Stalker is an executive vice president and financial adviser at CapWealth. For more information, visit capwealthgroup.com.