3 Savings Strategies for Your Kids on Tooth Fairy Day
The tooth fairy is a figure that likely brings back fond memories for many adults. Who doesn’t remember anxiously awaiting the arrival of this mythical lady who, while never actually revealing herself, would deposit the going rate for a newly lost tooth under your pillow?
I remember one of my biggest disappointments in childhood was having my brother spoil my fantasy by telling me that the tooth fairy wasn’t real (around the same time, he debunked Santa Claus for me, as well). But for children who still believe — and parents who enjoy living out this fantasy through their children — there’s always hope.
National Tooth Fairy Day falls on Aug. 22, providing a chance to not only celebrate this fun tradition, but also gather ideas to help you creatively teach your kids about saving money each time they lose a tooth.
The Origins of the Tooth Fairy
The most common tooth fairy origin story dates back to early Europe, where it’s said baby teeth were buried once they fell out, less, as superstitions dictated, new teeth wouldn’t replace the old. Another reported superstition was that parents believed witches might steal the teeth and place curses on their children.
Later on, in the United States, worried parents began burying the teeth in flowerpots. This tradition ultimately adapted again into children placing their teeth under their pillows, with parents switching the teeth out at night for a treat or money.
Parents around the world have been taking part in this fantasy for centuries, and have reportedly become more generous recently.
According to a poll conducted by nonprofit Delta Dental Plans Association, the average tooth gift was $2.42 in 2012, up from $2.10 in 2011.
So what can children do with this newfound largesse? Parents can actually use this moment as an opportunity to teach their children about financial responsibility and how to save money for their future.
Strategies for Teaching Your Kids to Save Tooth Fairy Money
Any time your children acquire money, it’s a great chance to use the moment as an opportunity to increase their financial literacy. If you’re not sure how to go about these lessons, consider the following strategies:
1. Add Money to a Fun Piggy Bank
Children always react positively to placing their money in a fun piggy bank. Luckily, there are tons of kid-geared banks out there geared toward teaching kids about money. Consider finding a bank that makes a noise every time money is added — or one that has a dollar bill tray that adds money similar to a cash register.
Some banks also show the denomination saved on the outside, which kids get a kick out of seeing, and is a great motivator for more saving.
To keep your kids excited about saving, consider having them take the money out of the bank around once a month to see exactly what the dollar amount looks like when counted.
These are all ways to have children understand money and their own savings more concretely.
2. Open Youth Savings or CD Accounts
If you want to step it up a notch from the piggy bank and introduce your children to the real world of savings, consider taking them to your local bank or credit union and opening a child’s savings account or youth certificate of deposit.
A number of financial institutions across the country offer youth-based, interest-bearing accounts that typically boast higher rates to encourage saving. Many of these accounts also offer low or no minimum balances requirements.
The experience of walking into a financial institution and speaking with an actual representative is something your children will never forget.
Additionally, actually receiving a receipt for each deposit and being able to check on the account online are both ways to give your children an early lesson on financial responsibility.
3. Have Them Set Savings Goals
For instance, if your child wants a new toy, you could agree to a matching deal where you pay half and your child pays half. If you child receives $2 in tooth fairy money, you could encourage them to put $1 away toward the toy and the rest in a savings account or CD.
If you want to make reaching each goal exciting for your kids, place a board or poster on their doors with financial goals. Each time your kids reach a goal, they receive a sticker or note of praise from you.
Taking this approach can show your children the rewards of saving money in the short term, which can make it even more convincing that saving in the long term (especially in an interest-bearing account) can be equally beneficial.
If you’re worried about handing over too much cash in your role as tooth fairy, there are more creative ways to handle the scenario. Babble. com writer Monica Bielanko told ABC News that rather than give your children big bills in exchange for their teeth, you could just as easily adjust the denominations.
“If your kid is into cold, hard cash, you’re doing something wrong,” Bielanko said. “Remember: $2 in quarters is infinitely more exciting to a little kid than a $20 bill.”
Photo credit: srett