Top of Mind

Teach Your Children to Save

My son has $400 in his savings account. Now, that might not sound like a lot, but consider the following:

  • My son is 12 and does not yet have a job
  • His father, who has been working continuously since he was 11, did not have any savings until he was in his thirties; and outside of retirement, struggles to save, even today
  • At least one survey has indicated that nearly 40% of Americans ages 18 and over have nothing saved

Thus, in relative terms, my son is “crushing it.” Why is that? Did I give him a series of financial pep talks? Have I been forcing him to save against his well? Nope.

What I have done is given thought to the notion that I want to prevent my son from growing up like me from a financial perspective. For those of you who are new to the blog, my financial misadventures have been fairly well documented.

So, when my son was seven years old, my wife and I bought him a wallet and one of those banks that counts the value of the coins he inserted. In the beginning, we let him keep all the money he received. Once he had a reasonable amount, if he wanted something when we were in a store, such as a toy or some candy, we would ask him to pay half of what it cost. At first, he exhausted his funds rather quickly. However, over time, he started asking for less so that he could keep more money in his wallet. We gradually evolved to him paying entirely for his store purchases, although at this point we did give him a bit of an income boost—a few bucks here and there when he did an exceptional job at his chores.

When the amount of money in his wallet was so large that he had difficulty closing it, we went to our local bank after school one day and opened a savings account. Other than what I was legally required to do as his parent, he proudly handled all the activity - filling out the deposit slip, counting his cash, determining the amount he wanted to deposit, etc.

Since that first visit to the bank, my son has made a visit each time his wallet gets too full. He decided, on his own, that when his wallet is full, he keeps half and deposits the other half; thus becoming an extremely young practitioner of the FIRE movement. In a little over a year, he has accumulated more savings than many others. I am hopeful that he will be able to carry these lessons into adulthood, since the power of compounding is going to be quite strong over a 50+ year time horizon!

What does this have to do with retirement? Based on my experiences in working with retirement plan participants, I would wager that there are lot of people out there, like me, who have been atrocious with savings for nearly all their lives, partly because they were never taught how to be responsible with money. If even just some of us taught our children how to be good with money, I suspect that future generations of those who work with retirement plans will have far less trouble getting people to participate. Now if only I had saved all that money I spent on pizza and pinball/videogames as a teenager….

Do you think that teaching children how to be good with money will pay off in the long run? Let me know via Twitter or at

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Investment products available through Cammack LaRhette Brokerage, Inc.
Investment advisory services available through Cammack LaRhette Advisors, LLC.
Both located at 100 William Street, Suite 215, Wellesley, MA 02481 | p 781-237-2291