December 22, 2016 – Retirement is a concept that most adults don’t fully comprehend, let alone kids. 401(K)s, mutual funds, compounding interest, Social Security… all of the terms and jargon surrounding retirement saving can be confusing even to the most well-educated person. One of the best ways to make sure that children grow to understand the importance of retirement saving is to start planting the seeds of knowledge at a young age. The movement to educate children about financial literacy at school is gaining traction across the country, but it is still important to talk to children about the importance of long-term savings outside of the classroom too.
A valuable tool for introducing the concept and value of long-term saving is WISER’s publication, Sonja Meets Her Future Self. The illustrated children’s book tells the story of a young girl named Sonja who travels through time and meets herself at different points in her life. The book was published in collaboration with the Wyoming Retirement System. You can download the book here to share with the children in your life. You can also watch a narrated video of the story. After you finish, here are some lessons you can discuss together:
1. Make Sure To Always Save Part Of What You Make
In the story, Sonja’s grandpa takes her to the bank to open an account, and every week after that, they go to the bank together to deposit part of her allowance. This is a great reminder to kids that even if they are making a small amount of money each week, it is worthwhile to put some aside. Once they get older and their paycheck grows, their weekly savings will as well. Although many transactions are done online, the weekly act of visiting the bank the way Sonja and her grandpa did can be a much more lasting reminder to always put something aside.
2. When You Do Buy Something, Choose Something With Lasting Value
Following her grandpa’s advice, Sonja begins saving a little bit of money every week. But he also makes sure to let her know that “it’s OK to spend money.” When you do, it should be for something really worthwhile. In Sonja’s case, she saved enough of her allowance each week to eventually be able to buy her first skateboard. She rides the skateboard all the time, and it even allows her to travel into the future—a purchase well worthwhile! When she is 18, Sonja tells her younger self that she used the money she has been putting away each week from her part-time job to buy herself a used car—another smart, worthwhile purchase. Sonja didn’t buy things she used once and then got bored with, she bought items with real value that she made long-term use out of. Her spending options are a great lesson that spending money is not bad, as long as you are smart about it.
3. If You Save A Little Bit Over A Long Time, Eventually You Will Have A Lot
Sonja started saving every week at the age of 11. At first, she only saved up enough to buy a skateboard, but eventually she had enough to buy a used car, and eventually enough to live off of in retirement. Her saving story is a great lesson that even if you only save a little bit, over a long time, it will grow.
During this gift-giving season, share the story of Sonja with a child in your life. It is a gift that can last a lifetime!