Teaching kids to save money early: their first savings account
Sabah Karimi • January 22, 2014if( has_post_thumbnail( $post_id ) ): ?>
One of the best ways to instill good money habits in your kids is to set up them up with their very own bank account. Teaching kids to save is easy when you have the right tips and tools at your disposal. The process of going to a bank to make deposits versus filling up the piggy bank (or whatever change receptacle) with money can help kids understand the value of saving and maintaining a healthy balance.
Remember, teaching your kids to only use what they actually need can go a long way toward a responsible future. Many banks have kid-friendly accounts with incentives for reaching savings goals, which makes money management for children a breeze. Help your kids take a big step now toward financial independence later by introducing them to the art of saving now. Here are some tips to picking your kid’s first bank account.
Money lessons: steer clear of online banking
Taking care of your account online is convenient but kids may not learn the fundamentals of savings, making deposits and managing their money on a computer screen. Stick with a brick-and-mortar bank to walk your kids through the process of making a deposit and seeing the cash in hand. It’s a good financial habit to instill at a young age and can help when it comes to teaching money management and teaching kids to save money.
Teaching children to save: make use of the savings booklet
Another way to ensure kids are mindful about their money is to have them write down savings goals and progress in a savings booklet. Teaching children to save is easier when kids feel like they’re actively involved in their progress. Many banks offer these as a freebie with a kid’s bank account. Some include stickers and stamps for reaching certain savings goals which can work as an incentive for kids to keep saving and reporting their progress. First National Bank helps kids track deposits with a Kids First savings book and earn rewards every time they make a deposit.
How to be good with money? Review interest rates
Banks need to stay competitive and will typically offer different interest rates for a basic savings account. Even though your kids may be just getting started with building up that savings account, take some time to educate them about interest rates and what they mean for their money. Feel free to shop around.
A good money habit: Look for extra rewards programs
Incentives to save can be very motivating for those young finance gurus-to-be. Some banks extend bonuses and rewards to kids that make frequent deposits, reach certain savings goals or participate in a savings challenge.
Teach children to save money by seeking out financial learning opportunities
Educating kids about allocating savings for different purposes — saving up for a new bike or new smartphone may be at the top of their priority list — is easier when the bank offers financial learning opportunities and programs to educate kids about the process. For example, PNC Bank’s Virtual Wallet account makes it easy for kids to divide their savings account into virtual jars.
Set your kids up for a healthy financial future with the right savings account. Money lessons for kids can start early and help them well into the future.
Have you set up a bank account for your kids? Share your experience in the comments below.
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