A previous article, Teaching Kids to Save Money, described simple ways to encourage children to save more. A Families.com member posted a comment after that article, and later sent me a private message with more information about a website she co-founded, called Early Earners (thanks Ami).
The site is a great teaching tool that will help parents explain the importance of saving money and how starting early will prepare them for the future. It also shows how Americans are spending beyond their means and how to avoid doing so. There are even calculators to show us how quickly saving –and spending– adds up. On the main page, just type in the amount you want to save each day over how many years, and it will instantly calculate a total. You might just be surprised.
On the Kids and Teens page, the calculator shows how limiting purchases can help you save money. For example, it shows how purchasing two sodas or otherwise spending $1.50 each day will add up to over $35,000 in 20 years (at an APY of 4.50%). There are other options in the drop down menu as well as an advanced calculator.
The Kids and Teens page also explains terms like APY or Annual Percentage Yield in layman’s terms so kids and teens can understand. It’s also informative for parents, since most of don’t have a background in finance. For example, it shows that children’s savings accounts don’t earn as much interest as other types of accounts. Even though they are easier to open and require less of a balance, it’s a big trade off due to the minimal amount of interest that can be earned.
Early Earners offers a lot of useful information for the entire family, so check it out sometime. You will be glad you did.