Piggy Bank to Bank

My kids get really excited any time some spare change is around. If there’s a dollar bill or two in the mix, forget about it. After playing the Money Game with them a few times, the allure of being able to add to their piggy banks grips them.

They’ve taken money from their piggy banks, spent it, and enjoyed it, sure! But when Casey or I ask, “What do you do with your money?” their now almost-instinctual responses are a singular, “I’ll put it in my piggy bank.”

Both parent me and CFP^® pro me are thrilled by this answer.

But a couple of years back, the latter in me began to wonder if it didn’t make more sense for my daughter, the oldest, to take the next step in the process and move some of her savings from the piggy bank to the actual bank. For a young child, the process of handing over some paper and metal and receiving a piece of paper back probably hasn’t fully clicked in yet. But as responsible adults, it’s what we do. Numerous practical reasons exist for her to do so as well.

When I approached my daughter about it, she was excited — it was something new for her, somewhere new to explore. I explained to her in as simple of terms as I could think of what would happen. I reminded her that the money was still hers, just like it is in her piggy bank, and that she was just moving it to a bigger, stronger piggy bank where someone would watch over it for her.

So with a little more coaching from me, we walked in, she handed over her bag of coins and dollar bills and said, as we had practiced, “I’d like to open an account please.” It was as priceless as it sounds, and I can’t think of a parent in the world who wouldn’t enjoy a moment like that to the end of time.

As for the practical reasons, here are a few:

The money is safer. She can avoid all sorts of perils from mischievous little brothers’ hands and avoid unfortunate events.

It’s a lesson about interest. In today’s interest rate environment, this one is a bit of a stretch, but kids get excited to add a penny to their piggy banks. So, hopefully, they will appreciate the same penny showing up “out of the blue.”

Invest checks from relatives. Your child will now have a place to deposit them, and depositing the check is another common process to learn about.

Link to an investment account. If you or a loved one has set up a long-term investment account for your child, you’ll likely be able to link the two up via ACH and move money in either direction. In time, it makes for a great segue to the lesson about taking financial risks for financial rewards.

I recently repeated the process of going from piggy bank to bank with my boys, and it was just as rewarding. Between trips to the bank, we’ll keep playing the Money Game at home to help them all refine their finance skills. And of course, Casey and I will be helping them track those pennies in interest on their bank statements and watching their savings and investments grow as they grow up.