Welcome to the Bank of Mom. We Pay 3% Interest. A Week.

We started a bold experiment recently in our house: paying our children interest on their savings accounts at the astronomical rate of 3% a week.

Why would any parent want to do such a thing? My argument is that it was the best way to teach our children about what should happen to money when you save it. I also saw it as a good opportunity to build their skills for evaluating how to spend accumulating cash.

It all started when my Paypal began to show signs of life, thanks to the freelance world of writing. Soon my account had grown enough that I began to wonder how I could put this new stream of income to good use.

I talked to the hubby who agreed that more money management skills would be beneficial for our two daughters, ages 9 and 15. But he had reservations about the 3% a week plan. “That’s an exorbitant interest rate to be paying,” he said. “They’re never going to get that again anywhere.”

I wasn’t too worried about that. We had never paid our children an allowance, and the amount that they would be earning with 3% on their Paypal balances would be what some kids get in allowance. I liked the idea of speeding up the process of money accumulation for them with interest, as a powerful lesson about the value of saving.

It was a lesson I remember distinctly from my own childhood: Going to the Savings Bank of Manchester branch in my hometown of Bolton, Connecticut, and handing in my passbook along with a deposit of money, and getting another small amount of money for free (back then, a regular savings account was paying about 3% annually). Even as a 9 or 10 year old, the math wheels in my head were churning, thinking of how much money I could make in that free money, if only I had more in my account. There was only one answer: save more money.

I want my daughters to incorporate a similar lesson into their lives, but unfortunately, there are no banks that pay 3% interest on savings at this time. So I decided to open the Bank of Mom.

The rules were thus: interest at a rate of 3% would be paid on daughters’ weekly Paypal balance. Application for interest needed to be submitted in the form of an invoice on the weekend.

At first, my older daughter seemed not to care. I chalk this up to her having too cushy of a life that she does not think of money enough. My bad. Also, she’s 15 and makes her own money in theater and babysitting, so doesn’t really need to depend on Mom’s wild ideas for income.

My younger daughter was much more on task with requesting and receiving her earnings, and was enjoying the way her $212.50 had ballooned to $225.43 in a mere two weeks, when older daughter caught on that this was a free ride she couldn’t turn down.

Younger daughter began submitting her invoices religiously, but older daughter would require reminders (which I reminded her were not part of the Standard Operating Procedure) and even with reminders, she did not start submitting on time until I put a deadline on the window for when submissions would be received (Saturday, 9 am to Sunday 9 pm.).

Everyone was on board with this plan for a few months, and I watched my meager earnings as a writer dwindle down in weekly payments of $12 and $15 and then $14 and $17 a week. The daughters began to accumulate. Their account balances surpassed mine.

The younger daughter seemed to learn some important lessons. “Camp costs $375 a week!” she exclaimed at one point, “That’s almost all of the money in my account.”  Gets you thinking, doesn’t it?

The summer came and requests for weekly payments of interest slowed down. I wasn’t going to remind anyone, because my account balance needed to regain some steam.

“I think maybe we should do once a month for interest,” I told my savers. “The Bank of Mom is a little low.”

“Really?” said younger daughter. “We don’t have enough money?”

“Well, you know how much I make as a writer,” I reminded them.

“That’s fine, let’s go to once a month,” said younger daughter, who we decided to give all decision-making power in this instance. “You need it more than I do.”

Could This Simple Financial Device Be Key to Launching Low-Income Kids to the Middle Class? — Chronicle of Social Change

As the economy continues to recover and social movements directed at addressing inequality continue to gain steam, one field of philanthropy that is in ascent is asset building, which helps low income people build up savings to expand their economic opportunity.

For children, one feature of the asset-building strategy is child savings accounts, with the goal of getting more children to start saving and building a nest egg for the future.

via Funders Behind Asset Building.

New Momentum After a Long Fight: Inside Kellogg’s Push on Children and Equity – Inside Philanthropy: Fundraising Intelligence – Inside Philanthropy

The high percentage of U.S. children living in poverty—one in five, at last count—hasn’t changed much in the past few decades. And while you’d think that would be a national scandal, this issue has just never had the political traction advocates have hoped.

Lately, though, things seem to be changing. Early childhood education is moving up on the national agenda and a new book by Robert Putnam on the deeply unequal lives of American children has received wide attention. Amid a growing debate over inequality, and also race, fresh opportunities are emerging to improve the lives of kids.

via New Momentum After a Long Fight: Inside Kellogg’s Push on Children and Equity – Inside Philanthropy: Fundraising Intelligence – Inside Philanthropy.

Feature CoPromoter: Social Change Advocate Kiersten Marek | CoPromote Blog

The internet is a great platform to voice your ideas and advocate for social change. Kiersten Marek, writer for news website Inside Philanthropy, uses CoPromote to spread her knowledge and connect with other like minded individuals. Using real life experience, she brings different perspective on many issues. Check out the chat we had with Kiersten below about her content, and the issues she is most passionate about!

via Feature CoPromoter: Social Change Advocate Kiersten Marek | CoPromote Blog.

Foundations Interested in Youth Media | The Chronicle of Social Change

The desire to be a journalist — to tell the stories that inspire feeling and change lives — usually kicks in fairly early in life. Many of us discover in high school that a source of great meaning and gratification comes from being able to communicate with others through writing or another form of media.

Which foundations support youth journalism in its many current incarnations, which now include blogging, videography, Youtubing and podcasting? Which foundations should grant seekers for youth turn to if they want to do the work of cultivating media and journalism for young minds?

via Foundations Interested in Youth Media | The Chronicle of Social Change.

Leverage Point: Why a Funder-backed Success in Slashing Unplanned Pregnancies Stirs Hope — Inside Philanthropy

In her 2014 book, Generation Unbound: Drifting Into Sex and Parenthood Without Marriage, Isabel V. Sawhill argues that unplanned births are a main cause of poverty, and that one of the most effective ways to reduce poverty (as well as inequality) is to help women, particularly young women, prevent unplanned pregnancies.

This is hardly a new idea, but Sawhill’s research has given it more heft, and anti-poverty funders should be paying close attention. While reducing unplanned pregnancies isn’t easy, it’s arguably a much lighter lift than tackling many of the other factors that underlie poverty, and that’s especially true in light of advances in contraception, as we’ll see in a moment. Enabling women to better control their fertility is also a classic upstream intervention that forestalls the need to address a range of other social problems, delivering lots of bang for the buck. Still, for various reasons, many funders that work on poverty steer well away from this area.

via Leverage Point: Why a Funder-backed Success in Slashing Unplanned Pregnancies Stirs Hope – Inside Philanthropy: Fundraising Intelligence – Inside Philanthropy.

Data Analytics and Child Protection in Los Angeles | The Chronicle of Social Change

On Wednesday, July 22, Los Angeles County’s recently formed Office of Child Protection will hold a community forum to discuss the simultaneously disquieting and promising prospect of using “big data” to help determine which children are the most likely to be abused.

The question of whether child welfare agencies should apply a statistical discipline called “predictive analytics,” which uses data to infer what may happen in the future, has sparked a now global debate weighing civil liberties, racial profiling and the alluring potential of accurately directing limited public funds to better protect children. Despite the understandable fears that come with applying an algorithm to the very human question of family dysfunction versus family strength, evidence from its use in other child welfare administrations shows promise.

via Data Analytics and Child Protection in Los Angeles | The Chronicle of Social Change.