Schwab MoneyWise ®
Schwab MoneyWise®

Starting the Savings Habit

Setting a realistic savings amount

In general, putting away 10 percent of income is a good savings goal for teens and young adults. Even young kids can be encouraged to save 10 percent of an allowance or gifts.

But just as with a physical fitness program, the most important thing is to get started.

How to make savings grow

When your child has accumulated some money, it's time to put it in a bank account.

An interest-earning savings account is a good first step. Shop for a good value, avoiding service fees and minimum balance requirements. Explain .

Here are some other tips to pass on to help kids save more:

  • Pay yourself first: Include savings as an "expense" in your budget.
  • Put at least a portion of any gift or bonus into your savings account.
  • If your child works, have them use direct deposit so that a part of their paycheck automatically goes into a savings account.
Our Two Cents
Interest is a particularly fascinating topic to kids, since the concept of "free money" can be quite motivating. Take a look at the to see firsthand how money can grow.



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