The Daddy Interest Rate

Everyone that becomes wealthy, invests, and everyone who invests, first saves. One of the ways I teach and encourage my kids to save is through the “Daddy Interest Rate”

For every dollar they save in their savings account I give them 50%. So if they give me $10 for their savings account, I give them an additional $5.

I only have a few rules around using the money in their savings account.

1. They have to save $1,000 in their bank accounts before they can withdraw any funds
2. Their account balance has to always stay above $1,000

Why?

I want them to learn to have a buffer. Life is unpredictable, always have some cash, you may need it.

It is amazing how fast kids pick up on this! Here is what happened last year on one of my sons birthdays.

My dad, Pops to my kids, gives each one of them $100 dollars for their birthday to buy what they want. Usually we go to Target to pick something out together. Sometimes it is a few small things, other times something big, but it is THEIR CHOICE, they chose…

Last year, after a LOOONG time Target my youngest son who is 5, picked out a few small toys and said,

“Dad, I don’t need anymore toys, I want to bank the rest.”

I was so proud! On his own, with money in his hand, in front of rows of toys he decided to SAVE at FIVE!

This is something small any parent can do. Even if the Daddy or Mommy interest rate at your house is 10% or as much as 100% I guarantee your kids will get the message.

How do you teach money lessons to your kids?