Author Topic: Starting the "Bank of Mom and Dad" for the youngins  (Read 810 times)

Captain DIY

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Starting the "Bank of Mom and Dad" for the youngins
« on: October 26, 2017, 11:11:30 AM »
I recently started a jar, labelled "Bank", and told my son that any of his money that he decides to keep in this jar will collect 5% interest at the end of every month. (I know, it's a ridiculously high rate-getting him interested!) He promptly decided to put ALL of his money ($20.54) into the bank so he could save it and earn interest! Mustachian Parenting win!
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dreadmoose

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Re: Starting the "Bank of Mom and Dad" for the youngins
« Reply #1 on: October 26, 2017, 11:17:17 AM »
Please let him know that I am willing to loan him as much money as he wants with the caveat that I get 4% of the interest and he can keep 1% each month.

Edited to add any value whatsoever to this post

When I started my first job at 13 (Sandwich Artist) my mom told me that any dollar I invested through my uncle she would double on it's way there. This did enforce the savings mentality, but she quickly figured out that a 13 year old was smart enough to know that doubling your money meant working all the overtime possible and saving 100% of everything so it was short lived (6 months or so).

I think the way you're doing it is great, the only compounding interest things I heard when I was young was the ol' do you want a million dollars or 1 penny doubled every day for 30 days.

PS The 13 year old took way too long to figure out the exorbitant MER fees being charged by said uncle's MLM investing company.. but that's a different story.
« Last Edit: October 27, 2017, 10:16:32 AM by dreadmoose »
Just starting on my FIRE journey, hopefully posting here creates accountability and eventually lowers my very anti-mustachian life habits.

protostache

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Re: Starting the "Bank of Mom and Dad" for the youngins
« Reply #2 on: October 27, 2017, 09:55:55 AM »
How old is your son? We're probably going to start doing this at some point, but my kiddo is only 16 months old and so has zero understanding of exchange.

Captain DIY

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Re: Starting the "Bank of Mom and Dad" for the youngins
« Reply #3 on: October 28, 2017, 06:32:03 AM »
How old is your son? We're probably going to start doing this at some point, but my kiddo is only 16 months old and so has zero understanding of exchange.
My boy is 7, and my girl is 3. I started it with the older one, and the younger gets a simple savings jar. She doesn't get it yet at all.
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wannabe-stache

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Re: Starting the "Bank of Mom and Dad" for the youngins
« Reply #4 on: October 31, 2017, 03:04:01 PM »
How old is your son? We're probably going to start doing this at some point, but my kiddo is only 16 months old and so has zero understanding of exchange.
My boy is 7, and my girl is 3. I started it with the older one, and the younger gets a simple savings jar. She doesn't get it yet at all.

my kid is 3 months old. sleeping through the night gets him $20 in his 529.

in all seriousness, i find fascinating some of the ways to use money to motivate.  paying for grades, chores, etc.  not sure how i will handle it.

i will say that any time i make a purchase that isn't 100% necessary - for example, i am paying a coach to train me to run what i hope is a sub 3 hour marathon - i put the same amount of $ into his 529.

slappy

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Re: Starting the "Bank of Mom and Dad" for the youngins
« Reply #5 on: October 31, 2017, 03:26:48 PM »
Please let him know that I am willing to loan him as much money as he wants with the caveat that I get 4% of the interest and he can keep 1% each month.

Edited to add any value whatsoever to this post

When I started my first job at 13 (Sandwich Artist) my mom told me that any dollar I invested through my uncle she would double on it's way there. This did enforce the savings mentality, but she quickly figured out that a 13 year old was smart enough to know that doubling your money meant working all the overtime possible and saving 100% of everything so it was short lived (6 months or so).

I think the way you're doing it is great, the only compounding interest things I heard when I was young was the ol' do you want a million dollars or 1 penny doubled every day for 30 days.

PS The 13 year old took way too long to figure out the exorbitant MER fees being charged by said uncle's MLM investing company.. but that's a different story.

Same here! I started babysitting at 11 and I made $50 per weekend. My dad said he would match whatever I saved, which was pretty much all of it. I actually felt bad and would make deposits and not tell him.

ChiefMomOfficer

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Re: Starting the "Bank of Mom and Dad" for the youngins
« Reply #6 on: November 01, 2017, 03:32:20 AM »
When I was a teenager, my father had a deal with IRA contributions that I thought was a good idea. He offered to double whatever I put in. So if I put in $500, he kicked in another $500 and we put it into an IRA. I still have that IRA today, although it's no longer in the Janus 20 fund like it was when I was a teen. It taught me not only about saving and investing for retirement, but also the perils of a stock market bubble. It flew high in the late 90's and then crashed to earth in the dot-com crash.
Mother of three boys, breadwinner & sole income earner with a stay at home dad husband. Writes at www.chiefmomofficer.org