In one of my very first posts, I shared a short-term savings plan for Christmas gifts. Kids can totally learn to save for Christmas gifts and purchase them by themselves. I’ve found that it makes J feel good to save the money, think of thoughtful gifts, make the purchase and wrap gifts on his own.
Because we’re using FamZoo cards now, we decided to utilize both the budget and additional account features for J’s yearly Christmas gifts list.
For two years now, J has been using cash, paper and pencil to manage his money. I’ve been paying monthly interest and bi-weekly allowance in cash. I’ve been calculating interest payments in Excel and emailing statements.
My goal was to help him understand cash (and math) by using hands-on, practical examples.
It’s been awesome. J started with $40 in his savings envelope in April 2016 and had over $500 by June 2018. (Pretty good for a kid with no job.)
Time to move on
When he turned 10 a few months ago, I knew it was time to learn something else. Cash is great, but how many of us really use cash and only cash every day? His financial education needed to include the responsible use of cards.
Last November, J opened a CD at Ally Bank. The idea came from a big conversation we had about making his money work harder.
He invested $500 in a 2-year Raise Your Rate CD at 1.5% at Ally. This type of CD allowed him to increase the rate once during the term. (For reference, his online savings account was earning 1.25%.)
Fast foward to this spring and I saw the rates going up. And up. And up.