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Financial habits start in childhood
Is it nerdy to use a piggy bank? I used a piggy bank most of my childhood and was the sibling who always had the most quarters saved. I took pride in my piggy bank and saved quite a bit from using it.
Some invaluable psychological and economic benefits come from religiously utilizing a piggy bank as a kid. If you’re lucky, the same saving habits will carry over through adulthood.
My piggy bank had three slots: one for giving, one for spending, and one for saving. What about your piggy bank?
Lsevenarn 7 things research says about people that use a piggy bank as a kid.
Seven things Research Says About Piggybank Users
1. Organization
When loose change was a thing, it could be disorganized and all over the place. Piggy banks teach kids how to keep their money organized and segmented. This carries over into adulthood, teaching kids the importance of keeping their finances organized, segmented, and transparent.
2. Compound Interest
Though putting money in a piggy bank will not compound as your money would in an investment account, if you continue putting money in your piggy bank long enough, you will accumulate a lucrative lump sum. When you keep saving, your balance inevitably grows. Implementing the habit of saving via the piggy bank prepares you for the magic you’ll experience with compound interest.
3. Setting Financial Goals
Most piggy bank users have a goal to save for X. Did you ever use a piggy bank to save for something specific? When you set financial goals – and write them down (the most important thing to do for any goal) – you’re more likely to reach them. Utilizing a piggy bank encourages the behavior of delaying gratification – not using a credit card to fund a purchase – and paying for what you want or need outright with cash. Discipline is a habit best learned as a kid.
4. Habit
Using a piggy bank encourages the critical habit of saving. If you’re a piggy bank user, every coin (or loose dollar) that comes across you will be thrown into it.
Acorns has a cool feature that invests the change from your digital transactions; piggy bank users always did this. So, the habit of saving comes naturally, which makes the transition to investing that much smoother. I was a piggybank user before investing at 14.
5. Save or Die
Once a saver, always a saver. Piggybank users always have in the back of their minds that word: save. Since saving was ingrained in them as a kid, they can’t escape it. They’re likelier to continue saving/investing their money because they always have.
6. Work
You can always find a spare coin on the ground, in pockets, or in your parents’ stuff, but your work ethic is the best way to fill your piggy bank. Consistently utilizing a piggy bank teaches you to earn money, so you can continue filing up your piggy bank.
7. Budgeting
This is one skill that has not traditionally been taught in schools. However, if your parents got you a piggy bank, you got some exposure to budgeting. My piggy bank had three categories: spending, giving, and savings. I put all my income in the giving section and split the rest between saving and spending. These simple tasks prepared me for the big leagues when I started bringing in more income.
The Value of Teaching Kids About Money Early
Using a piggy bank won’t promise you financial success, but the more exposure you have to financial education as a kid, the better off you’ll be. If you have kids, introduce them to bank accounts early. The sooner, the better.
Now that digital money is taking over, piggybanks make less sense.
Ditch the piggy bank and get your kids bank accounts, so they can start managing money.
Sources: Great Midwest Bank & Washington University in St. Louis
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.