Goal setting for good grades, toys or savings, helps children learn to become responsible for their own futures. Explain and demonstrate the concept of earning interest income on savings. Consider paying interest on money saved at home. Have children help calculate the interest so they can learn and see how fast money accumulates through the magic power of compound interest. Later on, they will also realize that the quickest way to a good credit rating is a history of regular successful savings.
Some parents offer to match what children save on their own.
I read of one couple who had their children pay one-half the cost of all their playthings over the years. They handed it back to them with interest at their children's college graduation. Introduce U. S. Savings Bonds to children. Take them to the bank when you make the purchase. Bonds are still a good value, cost one half the face value, earn interest and in some instances, will be tax-free if.