How do you show a child that saving money grows?
Interest is the best reason to save, but it pays once a month. Here is how to make it visible every day.
Ask a seven-year-old why they should save, and "so I can buy something later" is the best answer you will usually hear. Interest adds a second reason: money you keep makes more money. The trouble is that interest is slow, and children rarely see it happen.
Interest, in one sentence a kid gets
"If you keep your coins in the jar, the jar adds a few more coins for you." That is the whole idea. In JarSave, parents pick a yearly rate between 6% and 8%. Each month the jar pays one twelfth of that on what your child kept in it, on average, across the month.
Why the monthly number feels small
At 6% a year, 3,000 coins earn 15 coins in a month. For an adult that is a rounding error, and for a child it can be invisible, especially if it appears once and is gone from view.
Waiting is also harder when you are young. Studies of how people value delayed rewards found that children discount them the most and older adults the least (Green, Fry and Myerson, 1994). A payment once a month is a long way off.
Make the growth visible every day
JarSave still pays interest on the 1st, as a bank does. But the jar shows what has grown so far, every day: "+5 growing, lands 1 Nov", with a coin beside it that fills up towards the next whole coin.
If your child spends, the number grows more slowly. Keeping coins is what makes them grow, and now they can watch it happen.
Show the year, not just the month
Fifteen coins in a month is easy to shrug off. A year is more convincing. Kept for twelve months with the interest left in, those 3,000 coins become 3,185, because each month's interest earns interest too.
JarSave draws this as twelve gold bars of extra coins, so growth is a shape your child can see, not a sum they have to work out.
Three things to try at home
- Count the jar together on the 1st, when the interest lands.
- Before a small purchase, ask: "What happens if we leave it until next month?"
- Choose a wish that takes a few weeks to reach, so the growth has time to show.
JarSave is coming to iPhone. Join the waitlist.
