How to encourage teens to save...
My sixteen year old son works slinging groceries at the local market. It's his first job and he now has money to burn in his pocket. He's has been working there about two months when we sat down to review his financial situation. After two month's work he had accumulated a total of $24.35 in his savings account. That and another $0.65 will buy you a $25 gift card... That's about it. Not a lot to show for his efforts. In fact, he had earned just under $1,000 but had saved none of it. That was a light bulb that flicked on for him. He realized that at his current rate, he would need to work another six months just to save $100. Something had to be done.
I was pleasantly surprised when my son raised this idea himself. "Dad, I want to save 1/3, invest 1/3 and spend 1/3". I think he was expecting me to reject his idea. Just like the time he decided it was a good job to see if the ice in the pond was thick enough by sending his baby brother out to ice skate. Unlike the pond plan, the savings plan actually had merit. So, we set about a strategy.
- We set up direct deposit. This eliminated the immediate cash leakage that occurred by cashing his check at the store and plowing half of it right back into merchandise. A great windfall for the store, but not so good for my son's personal financial picture. By setting up direct deposit, his hard earned cash landed safely in a bank account where each transaction could be viewed and he could see exactly what was happening.
