The Real Secret To Getting Your Kids To Save Money
If your child’s piggy bank is overflowing with coins, it might be sign that they need their own savings account. Opening a savings account for your kids can help them be more aware of the money they are accumulating. Before doing so, think about what kind of account your kids should have.
Opening a savings account is not difficult. Just choose a day when you and your child can go to the bank together. As long as your son or daughter has some money to put into it, you will be able to talk to a bank employee about starting up a savings account.
Statement savings accounts give reports to both you and your child at the end of each month that detail all transactions that were processed that are associated with the account. Any withdrawals or deposits made from or to the savings account will appear in the report.
Read over the statement carefully with your child. Explain the various parts of the statement to them. Show them how much money they had and what they ended up with after interest payments and other account activity. Most statements list withdrawals and the date but not a detailed description of the transaction. You can write on the statement what each transaction was for so that the children get an idea of how they are spending their money.
Another type of savings account, passbook savings accounts use a small book to record the account balance. This book is passed through a machine that records deposits, transactions, and the current funds available. Many kids like having a passbook savings account because, whenever they want to, they are able to check on their account.
In addition to banks, credit unions of which you are a member will also allow you to open a savings account for your son or daughter. Some credit unions feature special savings accounts that have been designed just for kids of a certain age block. Such accounts often come along with free gifts and ATM cards with the child’s photo on it.
If your child receives a debit card along with their savings account, it can be used as if it were cash. Parents can put a child’s allowance money directly into their savings account and then show their child how to keep track of their funds by saving receipts from purchases and comparing these with the monthly statement they receive.
If a child is under eighteen, some states will issue custodial savings accounts. These accounts list the parent’s name as the account holder and the child’s name underneath. The account ownership can be transferred to the child when they turn eighteen.
Kids can learn how to care for their money and know where it is going by using a savings account, whether they use cash they withdrawal or a debit card attached to the account to make purchases.
Filed under: Management