Teaching kids about money matters always starts with the change in your pocket and a piggy bank. Don’t we all just love to see how children get all excited with the chinking sound of the coins?
Eventually, though, the piggy bank will get full and it will be time to take the next step and search for info on kids savings account. For starters, your child will keep track of his/her money more easily. It will also be a healthy first contact with the banking system.
Most banks and credit unions today offer savings accounts targeting kids. Be careful because some of them will charge fees on savings accounts with low balance, so this will be the very first lesson you can teach your child.
Another desirable feature you should pay attention to is the bank’s educational program, so they can extract more value from this first experience. Some financial institutions offer newsletters, for example, which help engage your kids into transforming savings into a habit.
Some banks today also offer a way to access bank statements online. It is yet another opportunity of educating your child, this time about safe websites and home banking systems.
Once you chose a good bank, you need to have a conversation with your child about the meaning of depositing money in the bank, and why giving up on the coin noise can be a good thing. Giving up immediate liquidity can be profitable in terms of interest, which can also be the theme of another conversation.
The actual act of opening a kids bank account and making the deposit is a day to remember. Remember to verify all documents needed before you leave to the bank, including yours — minors need a parent or guardian to be related in some way, although your name does not have to appear on the bank statement. This is an important factor, to ensure the kid their money remain theirs.
After a while, bank statements will start to arrive by mail. Save those and do not open them, let your kids do it. Take the time to read it with them and feel their joy with the pennies earned off interest. This is the best time to talk about setting saving and purchasing goals. These are two faces of the same issue: learning how to deal with money in a responsible manner.
