Take it to the Piggybank: Savings Accounts and Your Kids
Money management is an important skill to have for young adults as they start moving out and heading off to college. The earlier the basic lessons of a savings account are taught to children, the more comfortable they'll be handling their new financial responsibilities when they do move out on their own. Starter bank accounts is an effective way to begin teaching fiscal responsibility at an early age.
Why Start Money Management Young?
It’s a big world out there, and the older you are, the more financial obligations come your way. Your child needs to have the critical thinking and account management skills necessary to navigate the "real world," and the best place to begin is with a savings account. Wait until your child can understand basic math principles like addition and subtraction, or set-up personal savings account and a weekly allowance as a way to teach fundamental fiscal principles like deposits and withdrawals.
Setting Early Savings Goals
Most traditional savings accounts require an opening deposit as well as a minimum balance amount, but these are usually low enough to incentivize early savings. It’s also beneficial for children to see money in their account and helping them save the initial five, ten, or twenty dollars can jumpstart good habits.
In addition to the opening deposit, it can be fun and rewarding to establish early savings goals to teach your children that saving money instead of spending right away can lead to more substantial rewards. Try early savings goals for:
- Candy, toys, and treats
- Special outings (sports, amusement park)
- Movies and video games
- Gifts for others
To further the learning experience (depending on age), you can even encourage your child to save for long-term rewards like a car, college, or a rainy day fund.
Interest Can Be Exciting
Opening a traditional savings account for your child early, also gives them the opportunity to learn about interest. The earned interest may start small, but if your child can resist spending, they’ll soon see free money added to their account. It's tough to beat that!