This article appeared in the April issue of Chicago Parent. Jackson Beard is a freshman at Walter Payton High School.
Jackson Beard, the 2010 Money Smart Kid, is a freshman at Walter Payton High School in Chicago.
The purpose of saving is not to suddenly have a large sum of money all at once. The point is to save a little at a time over a long time. For younger children, parents can find ways to invest in their financial futures by opening a savings account and teaching the importance of financial stability. For teens, that means saving whenever and however we can.
How can saving in a savings account help us reach our goals?
Having a savings account with interest means that, for simply trusting a bank by depositing our money, they give us an extra sum of money back. Essentially, we get paid for our trust. Most accounts even have compound interest, which means that the bank pays interest on their own interest.
For example, if your 2 percent monthly compound interest savings account contained $200 when your parent opened it for you at 6 years old, by the time you enter college you would have $254.20.
Saving can, and most likely will, start small. Savings could start as a part of your weekly allowance or come from the money you could save by buying a smaller version of your favorite drink.
It is the small changes that can lead to the largest benefits; the sooner you start making those changes, the longer you will have for your savings to grow.