Parents should never pass up an opportunity to teach their children about fiscal responsibility. Yes, the idea of giving your child their own bank account can be nerve-wracking. But there are some simple tips that will help you determine if that’s the right decision.
One thing you can do early on is use coupons when you head to the store. This will allow your child to learn about the importance of saving money. It’s such an easily accessible option nowadays. Just a few clicks on a couponing site such as Discountrue.com will let you get great discounts in Target and other popular shops.
Another thing is to let your kid manage their money. The most crucial question that is asked in these instances is how old your child should be when they get their first real bank account.
Most financial experts suggest waiting until the child is at least 8 years old before taking the plunge. Anything younger than that and your kid may end up being more confused than enlightened. As with all parenting advice, think about your child’s personality and skill level when making this decision.
Your child should already have a solid grasp of what items cost before they receive a bank account of their own.
Giving a child an allowance is a great first step in this process. Children tend to appreciate money far more when they have their own to spend. It is usually between the ages of 8 and 10 when a child starts to learn about these philosophies and develop the money-saving skills that will carry them well into adulthood.
Talk to your child about how banks work, so you can gauge their level of understanding. When choosing a financial institution for your child, select one that caters to children and is willing to explain how their money is going to be stored.
You can reiterate the deposit and withdrawal process, so there is no confusion. Before taking them to a bank or a credit union, show them one of your own bank statements. This will provide a valuable lesson about savings accounts and accruing interest.
Children tend to be inquisitive on these matters, so be ready to answer questions.
They may also become nervous about the concept of depositing their money. They may not understand not receiving the exact same dollars and coins back in return when they make a withdrawal. Take the time to explain how a bank doles out their deposits and keeps track of the amount of money in the bank account.
By waiting until your child is at least 8 years old, a parent can also become the custodian of their little one’s bank account. This ensures the youngster will not be able to withdraw money without their guardian present.
Giving your child a bank account is the best way to teach them about savings.
While children often fail to take money matters seriously when their parents’ hard earned dollars are involved, the prospect of cultivating their own nest egg never fails to pique their interest!