Saving Money

Have you ever heard the saying, “Money doesn’t grow on trees!” Parents say it to their kids all the time, and they are right but wouldn’t that be so sweet! I would like to see something I want and just walk out into the backyard and pick enough money off of a tree to pay for it. Unfortunately that isn’t going to happen. So how do you get what you want if there is no money tree? 

You can get what you want by being smart with your money. Set a goal and keep to it. A goal is making a decision to do or get something. Once you set the goal you must decide what you have to do to reach it. Kids get money from allowances, doing chores, having a job, and holidays like birthdays. Getting money is the easy part. The hard part is keeping that money, or saving it,  because there is always something you want to buy. The best way to save your money is to put it somewhere that you can’t see it and banks have accounts just for that. 

Those accounts are called Savings Accounts. To open a savings account you have to go to the bank before you do anything else. If you are under 18 you can’t open an account by yourself. The first thing you need is some important documents that your parents have that they keep safe. Those are your birth certificate and social security card, that helps the bank know who you are. 

There are different kinds of accounts and with the help of the bank you will decide what kind of account is best for you. Some accounts pay more interest than others. 

Interest is money you earn on your savings. It is like winning a prize. The bank will use your money to make a loan to someone. When they do that, the bank earns interest from the loan. To grow your account faster, find an account that pays compound interest. The amount you put into, or deposit, in your bank account is called the principal. The interest you earn is based on the amount of principal in your account. The more money you have deposited means earning more interest. 

One way to help you save the money long enough is to make a poster of a thermometer. Mark the thermometer with numbers. Every time you add money to your account color in a piece of the thermometer. This will help you see how close you are to attaining your goal.