How To Raise Super-Saver Kids in 5 Simple Steps

Girl in superhero costume in front of savings chart.

George Samuel Clason’s 1926 classic, The Richest Man in Babylon, popularized the adage “pay yourself first” as a pillar of wealth building.

Easy to say. Hard to do. Particularly for kids.

How do we translate Clason’s undeniably sound principle into a lasting habit for our children?

Follow these five steps:

  1. Start with separate subaccounts. Comingling funds complicates savings. Without partitioning, spending prevails. Your kids each need two purpose-driven accounts: one for spending, one for saving. If each kid only has one card currently, order up another one specifically for saving. That’s where the pay-yourself portion will go.

    Remember, your FamZoo subscription fee remains the same, no matter how many cards you have in your family.

    To order separate savings cards, see here.

  2. Allocate earnings. Carve out some savings from every bit of “income” your children earn. Then, they’ll be paying themselves a fraction on every payday. Split allowance, chore rewards, and ad hoc credits percentage-wise between spending and savings.

    Learn more about automatically splitting payments here

    Teens earning a real paycheck can often request a split between accounts when setting up direct deposit with their employer. Each FamZoo card account has its own routing and account number visible on its Card Information screen. If the employer won’t split deposits (or if you want the flexibility of easily changing the allocation), consider directing the full deposit to the savings card first. You can sweep the spending allocation over to the spending card right after each payday.

  3. Stifle the savings siphon. FamZoo imposes natural friction to the free flow of funds from your child’s savings to spending. Kids must initiate transfer requests to justify moving money over. Parents can tap on the notification, review the rationale, and either approve, partially approve, or deny the request. This makes it a lot tougher for kids to “unpay” themselves on a whim by liquidating savings on spurious stuff.

    Learn more about transfer requests here.

  4. Encourage saving with incentives. Kids should see frequent, obvious rewards from saving. That’s the magic to making the pay-yourself habit stick. And nothing is more magical or sticky than experiencing the power of compound growth firsthand. Compounding rewards are easy to automate with FamZoo’s parent-paid interest. Pay an aggressive rate every week or month. Turn on activity alerts for the savings card to automatically remind kids of the compounding interest rolling in every cycle.

    Learn how to set up parent-paid compound interest here.

  5. Discourage unsaving with deductions. Dampen the urge to dip into savings with early withdrawal penalties — like clawing back any parent-paid interest delivered within the last week or month. Waive penalties for withdrawals backed by a planned savings goal, since there’s nothing wrong with a well-considered purchase! We just want to make unplanned “unsaving” unattractive.

Follow those five simple steps and getting your kids to pay themselves first will be easy peasy.

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