Growing up, you may have had a piggy bank (or some other coin container) to help you learn how to save money for future expenses.
Then, over time, you grew out of your animal-themed bank and graduated to a real bank account. But the lessons you learned during those early years of stowing away your earnings more than likely helped shape the habits you developed as an adult.
Coin banks are one of the best ways for parents to teach children to save money instead of spending it right away. And as you pass on our knowledge, it also helps you remember the budgeting basics you learned growing up.
Let’s look at why using a piggy bank is still as good of an idea as it was when you were a kid.
Reasons to use a piggy bank
It helps us keep the change
Although debit and credit cards are becoming the new norm, cash still has its uses. And one of the features of cash is that whenever you break a bill on a purchase, you get a handful of coins in exchange.
If you don’t end up using it on another purchase, all that change accumulates in your pockets or purse until you forget about it (or lose it in your couch or your car). Instead of losing all that money, why not drop it in a piggy bank? It’s a simple and satisfying habit, and it pays off in the long run, which brings us to our next point:
All that change adds up
It’s savings 101: many small deposits accumulate over time until you have a nest egg that you can use for a significant purchase.
Whether it’s for something relatively minor (like a dress or a pair of shoes) or something a bit more costly (like a car or a vacation), dropping your change into a piggy bank where you can’t immediately access it helps you save up for purchases you might not have been able to make otherwise.
It sets a good example
It’s no secret that kids learn by imitation. Using a piggy bank (or some other savings container) as part of your daily routine sets a good example of financial responsibility and shows your kids that small efforts can lead to big results.
Next thing you know, they’ll want a piggy bank of their own, giving you a golden opportunity to begin a conversation with them about saving, spending, and understanding their relationship with money.
It teaches the value of saving
What habit do almost all self-made millionaires share? They allocate 10-20% of their monthly earnings to savings.
Putting loose change into a piggy bank is a small-scale version of placing a portion of your paycheck into a savings account. It forces you to limit your spending and helps you save for important expenses in the future.
A brief history of the piggy bank
For thousands of years, people all over the world have used money-saving boxes with a coin slot at the top to encourage saving and discourage theft.
One of the oldest ceramic money boxes ever found dates from the 2nd century BCE and was shaped like a miniature Greek temple with a slot in the roof.
But pig-shaped banks didn’t appear until much later in cultures where pigs were seen as symbols of luck and good fortune. The oldest pig-shaped money containers were found on the island of Java and date back to as far as the 12th century.
In Western culture, many experts believe piggy banks originate in Germany, where the oldest example dates to the 13th century. Some say the English name “pig bank” has its origins in the type of clay formerly used for coin boxes and that the pig shape only followed later.
The piggy bank today
Today, piggy banks are widely recognized as a symbol for saving and frugality, leading many financial companies to use the piggy bank as a logo for their savings products.
You can now purchase a piggy bank pretty much anywhere, and they come in a wide variety of shapes, sizes, and materials. Although many still follow the tradition of a ceramic piggy bank that you have to smash to retrieve the money inside, newer versions have a rubber stopper on the underside or a removable nose to allow easier access. Some even include electronic coin counters that calculate your total deposits.
Involving kids in budgeting
Kids’ piggy banks can make for a thoughtful gift idea to help educate little ones about budgeting and money practices.
Here’s a model you can follow to help teach your kids how to allocate their money for different projects:
The ‘3 piggy bank’ model
Begin by giving your child three piggy banks, and explain that each one is intended for a different purpose, much like an adult has several different bank accounts.
One piggy bank will be for spending, one for saving, and the last for sharing. Explain to your child that each bank will receive a different amount of money.
- Spending: This bank is for money to spend on minor purchases like snacks or small toys. They should allocate 50-80% of their money to this bank.
- Saving: This bank is for larger purchases, like bigger toys, electronics, and video games. Ideally, 10-25% of their money should go to this bank.
- Sharing: This bank is for donations to charitable causes like animal shelters, food banks, and humanitarian organizations. Another 10-25% should go to this bank.
Tips to follow for teaching
- Once you've selected your allocations for each bank, stick with those numbers. Doing so will help teach consistency. Use stickers as a reminder.
- If you choose to give your child an allowance, use small bills and coins to make it easier to divide among the three banks. Many parents give between 50 cents and $1 for every two years of their child's age weekly ($1.50-$3 for a 6-year-old).
- Try keeping a picture of the desired item near the three banks to encourage saving.
- To help teach your child about interest on savings and checking accounts, you might choose to match your child’s contributions to their savings bank with a 5% donation.
- To help pick a charitable organization, you can visit GiveWell.org.
The bottom line
Teaching your little ones to save using a piggy bank may just have you feeling like a kid again yourself. But if you want to rediscover the excitement of smashing open your old piggy bank now as an adult, try PointCard™.
A transparent, easy-to-use alternative payment card, PointCard allows you to spend your own money while also receiving exclusive benefits, including unlimited cash-back on all purchases and bonus cash-back on subscriptions, food delivery, rideshare services, and coffee shop purchases.
You also get fraud protection with zero liability, no interest rates, and rental car and phone insurance.
Made to spend.