Our new, in-app Money Missions are designed to accelerate your child’s financial education and help us achieve our mission to make every kid smart with money. Now, when they log into their GoHenry app, kids can watch fun animated videos, take quizzes and earn points and badges. You can use your GoHenry parent app to track your child’s progress; when each lesson comes to a close, another one begins, and your child will unlock new levels as they progress.
Saving Habits is the third Money Missions topic. If you’ve tried to teach your child about saving money or investing money, you probably already know that it can be tricky for kids to understand why it’s important to make a budget and make smart spending choices – especially when they enjoy spending their allowance immediately!
GoHenry’s Money Missions can help make saving money fun for kids. As your child progresses, they’ll unlock more lessons on the topic of saving money, including how our money grows, compound interest, stocks, and shares.
Your GoHenry app makes it easy for your child to develop better saving habits, set a target date, and ask the app to move a set amount of money there every week. This is a great way to save money for a family vacation or a special purchase, and it gives your child the satisfaction of watching their savings grow.
Why saving money matters
Saving means putting money aside for future use. There are lots of different reasons why people save money, but it’s usually so they can buy something bigger or better in the future. When we think about saving money for kids, this could be something like a new toy, a bike, a game console, or a new phone.
Teen savings accounts are more likely to be focused on saving for the future, like going to college or buying a car, but it’s also useful to save for the unexpected, so there’s some extra money available when we need it.
To find out more, check out our Money Mission on why saving matters.
Kids learn saving habits
The best way for kids to get really good at saving is to make it a habit. That’s why it’s a good idea to save little and often. It also helps to put a little money aside on the day that they get it – before they have a chance to spend it!
Kids can boost their savings by saving money they receive for birthdays, holidays, or by saving money they earn from completing a particular task, such as walking the dog or tidying their bedroom.
Developing saving habits now will make it much easier for kids to save money in the future – it doesn’t matter whether they’re saving for a video game, a pair of sneakers, a trip, or a downpayment on their first home, the basic saving skills are exactly the same!
To find out more, take a look at our Money Mission on how to make a habit of saving.
Set saving goals
Saving money as a kid (or adult!) isn’t always easy – especially when they see something they want and are tempted to spend all they have to buy it!
That’s why having saving goals in mind can be a helpful reminder of why they should hold off on spending and keep saving. Helping them track how much they need and how long it will take to save up what they need to achieve their future financial goal.
There are two types of saving goals:
- short-term goals for things we will be able to buy in a few weeks
- long-term goals which could take months – or even years – to reach.
Whatever your child is saving for, helping them stay focused on their goal can help them resist the temptation to spend now, and learn to delay that urge in order to save money for something bigger they want.
To find out more, check out our Money Mission on saving goals.
How do you earn interest in a savings account
When we put our money into a savings account, the bank can use it to make even more money, so they pay us a little to say thanks. The money the bank pays us is called ‘interest’ and it’s a small percentage of the amount of money we have in the account.
For this reason, it’s worth working out the best savings account interest rate – as interest can add up! For example, if you save $100, and the bank pays you 2% interest, you’d earn $2 over a year. But if you save $10,000 you’d earn $2,000 in interest!
Earning interest on the money you’re saving is another great reason to encourage your child to save. It means their money will grow on its own, so they can reach their goal even faster.
Check out our Money Mission on interest to find out more.
What is compound interest?
Compound interest is an easy way to grow money without having to do anything! This is because, over time, the bank will pay interest on both the money that was first added to the account plus any interest the bank has added. This is called ‘compounding’.
If you want to know how to calculate compound interest, imagine putting $100 into a savings account with an interest rate of 5%. Because 5% of $100 is $5, after a year, your money will have grown to $105. And the next year, you’d earn 5% on the new amount of $105, so instead of $5 interest, you’d earn $5.25.
Take a look at our Money Mission on compound interest to learn more.
Want to learn all about earning, saving money, and spending?
Create a GoHenry account today and gain unlimited access to our new, in-app Money Missions. These feature fun videos and quizzes, designed to teach kids about finances and build crucial money skills from an early age.