Many of your savings habits, good and bad, begin in your early years. You can stash money in scads of places. Here are a few.
I remember my first passbook account and the excitement of savings to call my own, dollar by dollar duly recorded in a passport-like book that slipped neatly into my pocket.
The major gift-receiving occasions in my young life let me watch my money pile up in the little blue booklet. I felt the joy of my own rainy-day fund and imagined numerous scenarios of spending it one day soon.
My daughter Julianne also learned the art of saving early in life and when fortunate to garner spending money she always accounted for each penny. She also learned – and taught me – that you can save money in many places.
In first grade, Julianne fell off her bike. We dashed to the doctor’s office and soon returned home with a white pasty cast on her broken left thumb. Never one to slow down, Julianne headed back to class to show off her bandaged hand.
After much admiration from other students, school went on as usual. During lunch, Julianne bought her pizza and received her change, a quarter. Heading off to recess and her favorite swing set, Julianne faced a dilemma. Where to save her quarter?
With no pockets on her sundress, she stashed her quarter in her cast. After a few turns on the swing, Julianne tried to retrieve the quarter. No luck: The quarter traveled down her cast and stuck on her wrist.
She decided not to share where she saved her quarter until a few days later. Back at the doctor’s office she broke the news that a quarter nestled in her cast. The doctor removed the cast and sure enough there sat the quarter. The skin under the quarter grew infected and the doctor set the thumb in a soft removable splint.
The infamous quarter Julianne put in her piggy bank.
You save your quarters many ways. Many national and community banks still offer passbook accounts at interest rates slightly lower than for statement accounts. Passbook accounts remain popular even after about a century for several reasons:
ID security. Identity theft makes headlines every day, and thieves often target bank statements online and in mailboxes and trashcans. Passbook account holders receive no monthly bank statement: all information prints in the passbook.
More work to spend. Want a withdrawal? No simple ATM card swipe for you. With a passbook account you must open the door of the bank during the bank’s hours, walk inside and probably stand in line to see a teller.
Tangibility and teaching. In the age of bank with a mouse click, you get to hold a piece of paper representing deposits, balances and withdrawals. Kids watch the numbers grow and shrink printed in real ink on a real page.
Automatic monthly withdrawal from your checking account into your savings account also ensures you save, especially for cash reserves. As you grow older, you can register for automatic savings and investment deductions from your paycheck, rack up rewards on credit card purchases for automatic investment and even elect to up your tax withholdings to save via the government.
From our experience and although the method worked, we recommend not saving quarters in your cast.
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Maureen Crimmins is the co-founder of Crimmins Wealth Management LLC in Woodcliff Lake, N.J. Her websites are www.CrimminsWM.com and www.RootsofWealth.com.
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