Teaching children money skills: start early with savings accounts.

• Author: Bohi, Heidi
• Position: FINANCIAL SERVICES

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When the three Hoxie boys reached the age of about five, at a time when most children have little regard for money, each of them was given $5 and taken to the bank to open their first savings account.

Today, Zachary, 18, Brandon, 16, and Lucas, 13, have $2,000, $500 and $200, respectively, in their accounts, which have over the years had even higher balances, and as each begins to take on outside jobs, are growing as the boys deposit more money than weekly allowances into their accounts.

START YOUNG

As a parent and a manager for Northrim Bank, their mother, Dawn Hoxie, felt it was her responsibility to get the boys to start thinking about saving and managing money at a young age. She tapped into Northrim's Kid's Club Savings Account program, one of several investment clubs available for kids under 18 at banks and credit unions statewide. There is no monthly service charge, participants are given a free gift when they open an account, and special contests and prizes are featured throughout the year.

"Once they started seeing their accounts grow, the more they saved, the more they wanted to save," she says. At the same time, it is teaching them critical life lessons about money, setting priorities, and charting their financial course in life by teaching them basic money-management skills. Although interest rates are very low now, a bank is a safer place to keep their money than a piggy bank, it is at least earning some interest, and they are not as likely to spend it when it is not easily accessible, she says.

Since starting their accounts, Hoxie says, her boys are using their developing interest in personal finance to set spending priorities and understand the difference between wants and needs. Zach, the oldest, is using some of his money to fund his education at the University of Alaska Anchorage, and he paid for a trip he took to Germany last fall. He also pays for his own gas, which helps him plan his weekly spending, and has since started a checking account, requiring him to regularly monitor the available balance.

LEARNING TO SAVE

Although banks and credit unions with these youth savings programs certainly hope that as they mature into adults these children will continue to bank with their institution, all agree that their investment is also a way to teach children to make room for charitable contributions part of their financial plan, helping make communities in Alaska a better place to live. Ultimately, this knowledge will also make them better citizens.

"There's a wide variety of things we want to get kids to think about," says Bobbie Craig, assistant marketing officer for First National Bank Alaska. "As part of teaching children to save, we try to get them to think not just of themselves, but of short-term goals, such as buying a card for their parent, saving money for a...