By Grace Moody, ’14 and Melanie Terez, ’14

It’s the symbol of childhood saving. The large, pink object sitting on every child’s dresser. All children await the day they can empty the piggy bank and count what seems like an immeasurable amount of shiny coins.

Fast forward 10 years. Now, a quarter seems almost worthless. As teenagers are preparing for college or to live independently after high school, perhaps piggy bank savings should have been taken more seriously.

The financial habits formed during childhood greatly influence individuals as they become financially independent.

According to the article “Understanding Habit Formation” from Psychology Today’s website, forming habits is “the process by which new behaviors become automatic.”

Habits are formed through repetition, causing an action to become almost second-nature.

“Old habits are hard to break and new habits are hard to form. That’s because the behavioral patterns we repeat most often are literally etched in our neural pathways,” Psychology Today stated. “The good news is that through repetition, it’s possible to form new habits.”

MSN Money’s Liz Weston wrote in “Many money habits are set by age 7” that researchers have found people’s financial habits are almost entirely set by the age of seven.

Sophomore Steven Huang had experience saving at a young age.

“We develop good habits and bad habits,” Huang said. “If we develop the habit of having a budget count, it would definitely influence us when we go out, and at least to have a more stable, secure life and avoid getting in debt.”

Similarly, senior Reyna Lusson learned about saving through her parents’ stress on teaching financial habits that they believed would benefit Lusson later on.

“I think that financial responsibility is something that my parents have really stressed as I grew up, and that’s a value I’m definitely going to take with me to college,” she said. “I do make myself think very carefully about what I’m going to spend my money on and if it’s worth it in the long run.”

Huang moved to the U.S. from China about three years ago. In China, his mom would save about 200 wen from her paycheck, equal to about $50 each month, to put into Huang’s college savings account. Huang explained that while that may not seem like a significant amount of money, in the long-term, those $50-a-month payments add up.

While having parents set up a college fund for kids is beneficial, Business and Finance teacher Eva Frustaci also recommends students maintain a part-time job. Her parents encouraged her to work two jobs in high school.

Lusson is already preparing for the loans she will eventually have to pay off.

“I think that the same strategies that I used to save up my money until now are going to go into play with my student loans,” she said. “I’m hoping to create a reasonable goal for myself in terms of monthly payments, and then meet it each month. I think that the most important part is to stay on top of it and not fall behind.”

Frustaci, however, is strongly against taking out loans, unless it is the only option.

“I think having that savings is very important, and I think if you can avoid borrowing in any way, not that it’s doable in all situations by any means, but I think you [should] try to do what you can,” Frustaci said.

Amanda Fellabaum, lead customer service representative at Fifth Third Bank, would agree that students should try to avoid taking out loans.

“I would definitely say, for kids applying for student loans, be careful. Make sure you know what you’re applying for, [whether] you need the extra meal plan, if you live close to where you’re going to school can you live at home before you move out?” Fellabaum said. “Just be mindful because a day will come when you have to pay it back.”

Barrington Elementary School teacher Sarah Imes did not receive an allowance growing up. She warns against children receiving allowances without having to work for it.

“I think kids need to learn to work. … I think if it’s tethered to some chores then it’s probably an OK beginning,” Imes said.

Fellabaum also believes that allowances that children have to work for are helpful ways for children to earn money while learning the importance of chores.

“I think [allowances are] definitely beneficial. They help kids learn [that] you have to work for your money,” Fellabaum said. “In the real world nobody hands you anything, so I think it’s a good learning tool for kids before [they] can start working to do [things] around the house and help out to earn money.”

Frustaci, who has two young children, hopes to instill saving habits in them early on, in part by giving each of them a piggy bank to save money they don’t wish to spend yet.

“I think that people who can delay gratification tend to be more successful. That’s my belief, but [I think people] tend to be more successful when they are saving,” Frustaci said. “So I do try to instill in them that, ‘If you spend this now, you can’t have that later.’ That is your opportunity cost: What are you giving up by spending this money?”

Imes’ students are older than Frustaci’s kids, but while they are only third-graders, she can guess who will likely be successful in saving money in the future and who may not.

“I see parents who hand their kids $20 bills to spend on mini-mall, and I mean I’ve seen it for years,” Imes said. “And I have some kids that come in and count out the quarters and I can tell they’re thinking about it and had to bring in the piggy bank.”

Our childhood relationship with the money in our piggy banks is a significant factor in our savings habits as we become financially independent, but it is not the only factor.

“I think a lot of times we learn from people that may be our parents, or from teachers … how to build these habits. So I think there is a lot of nurture that goes along,” Frustaci said. “People’s personalities [also] impact their spending and their need for gratification quickly, and sometimes that will impact your buying habits later more than somebody who has the ability to hold off that gratification.”

Imes agrees that the ways in which a child is raised impacts their money habits later on, but guesses that nature also plays a role.

“I think you learn at an early age how to organize the money, earn the money, save the money. I think either you’re a spender or you’re not a spender,” Imes said. “Some people are just innate and I think some are hard-wired that way by parents, family, friends or whoever can guide you better.”

Imes recently taught her students a unit on personal finance and basic economics.

“I don’t have a hands-on way to teach it, but we emphasize the whole idea of economics which is a little more global than just saving,” she said. “It’s more like producers, consumers, resources, it’s, the making and spending of wealth. … We talk about opportunity cost, and what you have to give up to get something else.”

Imes attributes her former spending habits to her mother.

“My mom had the philosophy that if you earned the money, it was yours to do with whatever you wanted,” Imes said. “So when I babysat, I burned through [my money] and I wish I would have saved it.”

While teaching her third-graders the basics of saving money in their Economics unit, Imes guesses that saving and spending habits are primarily influenced by parents and one’s life at home.

“I think generally the whole savings thing comes from home. It’s a family thing. I think you have to start teaching kids at home, early,” Imes said.

Lusson would agree with Imes that developing wants versus needs has helped her with money habits as she has grown up.

“I think it’s an importance that is developed by each individual family, because I know that some parents are willing to give their children money for whatever they want, really. In my family my parents are willing to contribute some, but they’re not going to pay for [everything],” Lusson said. “So for extras and things that aren’t necessary, it’s important that I save my own money to do those fun things that my parents aren’t willing to finance.”