Saving money is a fundamental skill that all children should learn from a young age. Children who establish saving habits now will have a much easier time saving as they get older.
According to Youth.gov, only 27% of youth knew how to calculate simple interest rate. If more youth knew how to calculate interest, seeing how much money they can “earn” might incentivize them to start saving.
The 5 Important Things
- Saving is a valuable skill to have, no matter how old you are or what kind of job you have. No matter how good or safe you think your job is, there is a chance that you could unexpectedly lose your job or have to pay for something very expensive. If you make saving money a good habit and have money in your savings account, it can help you pay for the things you need until you get a new job or help you to pay for that expensive thing you need.
- As you get older, you will need to make choices about how to spend your money. Even if you can AFFORD to buy something, that doesn’t mean you SHOULD buy it. Sometimes, it’s good to save that money in case there is an emergency or so you can buy something very expensive later.
Even saving just a little each day adds up. One dollar each day doesn’t seem like much, but if you put a dollar into your savings account every day, you will have $365 in your account by the end of the year.
What could you buy with that $365? An Xbox, a television, a really good bike…or you could leave it in there and end up with $730 after two years!
Check out how much you could save if you put $1, $2, or even $5 into your account every day:
The figures above are based on an initial deposit of $5.00 and 0.05% compound interest that accrues monthly. These figures are estimated.
- When you put money in a savings account, it “accrues interest”. This means that the credit union puts a little more money in your account based on the money you have saved in your account.
At the MTEFCU, for example, the primary savings interest rate is 0.05% right now. This means that for every dollar you keep in your savings account, you will earn 5 cents. That might not sound like a lot, but it adds up when you have a lot of money in your account.
- A savings account is a safer place to keep your money than a piggy bank.