Saving for kids comes a lot easier (adults, too) if they use this one, weird trick I'm about to show you.
There is power in naming something.
Naming something gives it a purpose. A place to focus an intention.
Savings accounts are no different when it comes to both needing a name and an actual purpose (which go hand-in-hand, by the way).
When a savings account lies around, unnamed, it’s this sort of blob.
Sure, it can grow. Sure, you can use it for goals as they come and go. But without naming it something that aligns with its purpose, the time it’ll take you to get to whatever goals you have will take longer – no matter if you’re a child or an adult.
Clarity is powerful, after all.
Leave an un-intentioned amount of money aside for too long, and suddenly it becomes the perfect amount to spend on a new video game, or absorbs a convenience-store candy section addiction.
Account money gremlins are a real thing, my friend. Whether you've got a kid savings plan or an adult one!
How to Guide Your Kiddo through the Savings Account Naming Process
I hope I’ve convinced you that that this naming thing? Is sort of a big deal. Getting your child to do it early means you’re setting them up for more savings success for the rest of their lives.
So, let’s get started with this mini-savings action step that makes saving for kids much easier.
Step #1: Set Up Somewhere for your Kid(dos)’ Money to Grow
The first step, of course, is for them to have an actual place to accumulate their money.
- Don’t have a savings account open for them yet? I’ve got you covered with how to open your baby’s first savings account (whether they’re still a baby or waaaaayyyy past the pacifier stage. No judgment here!).
- Not ready to do that? Then you’ll want to use a piggy bank of some sort. Here are 21 particularly cool piggy banks for your kid(dos).
Step #2: Help Your Child Identify their Savings Goals
Sit down with your child and ask them what their goals are for their money.
What do they want to buy soon? What do they want to buy later?
Hint: they might not know how to prioritize now rather than later at this point in their lives, and that’s where you can help them.
Your idea for the purpose of their savings account is probably going to be quite different from your child's. After all, you've been in this thing called the “real world” for quite some time now. You aren't wet behind the ears, and you know that life takes money.
So your ideas may be things they'll need to purchase in their teen and early adult lives, such as their first car, textbooks for college, college in general, etc.
Their savings goals? Well they might be a bit different than yours. More tangible and instant gratification-y like vacation spending money for the summer or a new video game that's due to hit the markets next month.
So, it’s best to find some sort of compromise. And if you’re just teaching your child how to save money as well as goal setting in general? Well then you should probably stick with a short-term goal until they grow their instant gratification muscle a bit.
Remember, you can build up to the long-term goals over time.
Step #3: Rename their Account or Piggy Bank with something Cool
Once they’ve gotten clear on what they want to save for in the short-term (remember, start short, then go long), it’s time to come up with a cool name they can associate with the goal.
This name is one that gets them excited, and can pull them back into the process once they’ve lost interest in savings.
Here are some savings goal ideas, with a spiced-up version on the right side:
- First Car Fund = Sweet Sixteen Freedom
- Vacation Spending Money = Boardwalk Money (fill in wherever you’re going)
- Textbooks = Astronaut textbooks (whatever career they’re interested in right now)
- Video Game = Pokémon Ultra Sun Release
- Toy = Stuffed Flamingo
How to Physically Name Your Savings Space with this Goal
How you physically add a name to your savings space (either savings account or jar) depends on where it is.
If you've got an actual savings account, then find it below + click for nicknaming instructions:
- TD Bank
- Wells Fargo
- Bank of America (look at the lower right-hand sidebar for where to go after you sign in)
For us, I have my two-year-old’s savings account at CapitalOne360. At their bank, you can change the “nickname” of each savings account you own.
Here’s how I do this:
Step #1: Sign into the account.
Step #2: Click on the account you want to change the name to.
Step #3: Click “Add a Nickname.”
Step #4: Type in the nickname + click “save.”
Then if I want to change the nickname? I can do so at any time by clicking on the account that I want to change, and then clicking “Account Details.” There’s an option next to the “Account Nickname” to “Change Nickname.”
If you are using a piggy bank of some sort? Then you’ll want to write the new nickname down on a piece of paper and tape it to the bank. You can let your kids write the name + decorate the label however they’d like using crayons, colored pencils, glitter – the works! Whatever gets them excited about their new name + corresponding goal.
You + your child may not have considered the power behind naming savings accounts by the goal that you're trying to meet before. But I hope you’ll trust me on this one and take the time to not only set up a space for savings, but then name it based on either a short or long-term savings goal.