Let’s take a look at compound interest as a way to help your child understand why saving is so important. Remember that $4 spent each day on “I want” items? With that $4 of “I want” money, pose this question to your child: At age 12, you decide not to buy soda or snacks. Instead, you save the $4 a day and put it into a savings vehicle, such as a long-term CD that pays 5 percent annual interest, and leave it alone. At age 67 when you are ready to retire, your savings totals how much: (a) $1,159, (b) $25,355, (c) $80,352 or (d) $427,025?
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