Hands up if you remember school banking? If you do, you’ll almost certainly have treasured memories of little bank books emblazoned with thrifty squirrels, bicycles, and cricket bats. And of filling in deposit slips and carrying your sixpences to school in your savings book’s outer envelope. For those who were in a class of dedicated savers, you may even have had the heady experience of seeing the school banking shield hanging on your classroom wall!
Some of the earliest opportunities for children to bank were provided by ASB’s Penny Bank Accounts established in 1875. Later on, in 1934, The School Banking Scheme was set up to encourage children to save on a regular basis through weekly school banking. At its height, almost 90% of New Zealand Schools were involved in the scheme, accounting for around a million pounds in savings.
In 1992, however, things took a different turn. This was the year in which any savings accounts which weren’t linked to an individual’s tax number were to be taxed at the rate of 33 cents in the dollar. As most school children didn’t possess a tax number, there was little incentive for them to make deposits.
As the years have gone by, some banks have endeavoured to provide a service to school students by sending staff into classrooms to help pupils set up bank accounts. Today, some banks are still helping with money matters by assisting with financial literacy teaching. But incentivising a child to save, or providing them with a bank account so they can start formally depositing, is largely down to parents, who often have little discretionary time. This is why, as a grandparent, you may want to help get your grandchild into the routine of saving. If you do, the tips below can be a way to start.
- Establish savings jars for your grandchild, and keep these at your house (‘The Bank of Gran’ or ‘Grandad’). To do this, choose three lidded jars, one labelled ‘save’, one labelled ‘spend,’ and the other labelled ‘share.’ Help your grandie to decorate the jars with labels, glitter, or cut-outs and glue.
- Whenever your grandchild does a little chore for you, supervise them as they divide up their ‘pay’ according to the labels on the jar. Explain one jar is for buying small or immediate treats (such as a fancy pen or an ice-cream), one is for saving towards a larger purchase in the future (such as a bell for their bicycle or a toy), while the third jar is for items or money to be given to others (such as a birthday card for mum or a donation to the SPCA).
- Make saving fun by working with your grandchild to make a Papier-mâché money box. Or gift them a novelty money box which rewards the depositor with a cute noise when a coin is placed in it.
- Agree a ‘top-up’ plan whereby each time your grandchild reaches a savings target (such as $4), you top it up by a dollar to make it $5.
- Plan an activity with your grandchild you can both save towards (you might save for movie tickets while they save for popcorn). Be creative about the ways in which they can earn the money for this (you might, for instance, both have items you can sell on Trade Me or Facebook Marketplace).
- Talk to your grandchild about your experiences of School Banking, and head to a museum to look for examples of old savings books and money boxes.
- Talk to your grandchild’s parents, and ask if they would like you to accompany your grandchild to the bank to help them set up an account of their own. (This will likely involve gathering together required identification documents, and making an appointment with your child’s chosen bank, so call ahead of time for the necessary details).
For more ideas to help with your child’s financial literacy, check out ASB’s helpful site.
Help build a sound financial future for your grandchild by introducing them to saving as soon as they’re ready for it.
