By Joe Birkestrand, Communications Coordinator, Iowa Bankers Association
It’s not controversial to say that saving money is a skill that everyone needs to understand. And like anything, the earlier in life that you learn how to save, the more likely you will be to apply those skills later on. But how do you get children excited about saving?
F&M Bank & Trust in Burlington does it through hands-on experience. In 1997, the bank started a program called F&M Kids Bank, which allows elementary students to operate their own savings bank. Not only are the students able to make deposits, they also work at the bank, accepting deposits from their classmates and keeping track of accounts.
In 2012, the success of the Kids Bank and the request of a local high school for help creating a financial literacy curriculum that would help satisfy Iowa Core requirements led to the creation of a F&M Teen Bank. Financial Literacy Coordinator Jennifer Schuster believes the banks provide students with an entry point to saving for their futures. The banks have been so successful that F&M Bank currently has 850 Kids Bank accounts and 600 Teen Bank accounts that it is servicing.
“We really encourage the students to save for their future,” Schuster said. “So many of our students have plans to go to college, and they know the expense they would incur, so one of the things they say they are saving for is college.”
There are several differences between the Kids Bank and Teen Bank. First, the Teen Bank uses a computer to record deposits while the Kids Bank uses hand-written ledgers. Teen Bank students are also given an ATM card to access their accounts – although they have a maximum daily withdrawal amount – and they are given mobile and online banking options to track their accounts.
There is also a difference in the deposit limit on each bank. Kids Bank allows students to save $25 per week while the Teen Bank allows students to save up to $50 per week. Schuster said that the increased weekly deposit amount doesn’t always equate to more savings, however.
“It seems that our elementary kids are better savers than our teen savers. I think it’s because (the teens) like to spend more, but we’re out there trying to encourage them to save,” Schuster said, laughing.
One thing that is not different, however, is the 4 percent interest that the students earn on their accounts. The interest rate is one that has not changed since the Kids Bank was first introduced in 1997. It is used as an incentive to compel students to participate in the banks, but also as a way to show the value that storing money in a bank can provide.
On top of receiving valuable financial literacy lessons, the students also get a full introduction into the inner workings of banks. While students work as tellers, they also serve as the banks’ boards of directors. The boards make decisions on things like advertising the banks at the schools. Promotions have included advertising the banks at a school dance or during halftime of a basketball game. The student boards also give a presentation to F&M Bank’s Board of Directors each year on the progress of their banks.
Along with the school banks, F&M Bank also provides lessons on different topics, including identity theft, saving for the future and basic information on financial planning. Schuster said that all of the financial literacy programs that F&M Bank provides are a great way to give back to the community.
“I personally believe that it’s one way to change our society,” Schuster said. “We can help as many students as possible stay out of poverty by educating them about financial literacy. And, as a bank, we have a commitment to our community, especially our youth.”