Howard Bank: Teaching Kids Dollars and Sense

A weekly allowance is often a child’s first taste of handling money. But parents’ rules for spending those dollars can vary widely from “Don’t spend it all in one place” to  “Buy whatever you want!” With such scant instruction on money management, no wonder many of us grow up to have dollars but no sense.

To stem the tide of unwise splurging, Howard Bank participated last month in the  “National Teach Children to Save Day” established by the American Banking Association a decade ago. Every year since its inception in 2004, Howard Bank has joined with thousands of bankers across the country to plant the early seeds of financial education.

“The thing with learning to save and to manage your money is that you can never start too young,” says Christa L. Spalding, Vice President and Relationship Manager at Howard Bank’s headquarters in Columbia. Spalding visited Resurrection St. Paul School in Ellicott City recently, while other bank representatives went to Clemens Crossing and Waterloo elementary schools. The bank operates a “branch” at each of these schools where students may apply for a job as a “student teller,” open a savings account, and make weekly deposits. About 100 students at each of the three schools participate.

“Saving for something is counterculture to our society, which encourages instant gratification,” says Karen Murphy, principal of Resurrection St. Paul. “Managing money is an invaluable life skill that we can easily bring into the classroom with the support of our school bank.”

To mark “National Teach Children to Save Day,” Howard Bank this year offered to deposit $5 into any account opened for a minor at one of its “actual” branches, raffled off a $100 savings bond, and distributed special coloring books, Spalding says.

Having bankers teach money management is a real boon to parents who may not have enough expertise to teach sound savings methods to their children, says Mary Ann Scully, Howard Bank President and CEO. “Kids need to be taught, for example, about the incredible power of compounding if they begin saving when they’re young.

“It’s important for children to learn that someday they will be responsible for their own financial security,” Scully points out. “They should not have a sense that someone else will provide for them (in old age), especially as our government deficit grows and negative savings rates continue.”

Seven states ranging from Alabama to New York — but not including Maryland — make financial education a high school graduation requirement to fill the gaps in students’ financial literacy, according to the ABA. This curriculum shift is in response to a survey which shows the direct buying power of kids aged 4-12 was expected to exceed $51.8 billion in 2006. According to Teen Research Unlimited, teens spent $169 billion in 2004.

“Helping children understand, early on, certain basic rules is good for everyone,” Scully says, “as they will be bank customers before we know it.”

Howard Bank has branches in the Village of Hickory Ridge in Columbia, on Snowden River Parkway in Ellicott City and on Johns Hopkins Road in Maple Lawn. A fourth branch in Ellicott City, at the crossroads of Route 40, Centennial Lane and Frederick Road, is slated to open in early 2008.
For more information on Howard Bank’s savings ideas and accounts, please call Christa Spalding at 410-750-0020.