The material presented here is for educational purposes only and is not intended to be used as financial, investment, or legal advice.
Saving Up While Growing Up: Teaching Kids to Save Money
Give your kids a head start on managing their money.
When is the best time to start teaching kids to save money? As soon as possible. The earlier children learn how to take care of their funds, the more likely they are to be able to successfully manage their money by the time they reach college age.
Here are four reasons to help your children or grandchildren open a savings account now:
1. They Learn About Money:
Teaching children how to handle their finances when they are young can help them become financially savvy adults. Particularly with a savings account, children can understand the benefit of putting money away for future needs and how their money can grow with the dividends it earns.
2. It Gives Them a Responsibility to Manage:
Once the account is open, you can use it to teach children about financial responsibility. When they are really young, just teaching them to check their account once a month can help them feel responsible for their money. As each child gets older, give him or her increasing responsibility for handling their account by helping them decide when to add to their savings and when to draw from it.
Nearly 63% of surveyed parents have talked to their children about at least one major financial concept; however, less than half of surveyed parents have yet to open a checking or savings account for their child, according to research by Policygenius.1
3. Goals Become Easier to Understand:
With a savings account, children can actually see their money grow as they save more — plus watch it earn dividends. They can learn to set savings goals and actually accomplish those goals, which is a vital skill in early adulthood!
4. You’re Helping Them Get a Head Start:
Set up each account with your child as the primary account owner and you as the joint owner. That way, when your kids are all grown up and ready to go to college, they will be much closer to earning the Relationship Rewards Loyalty Bonus Point for 20+ years of continuous membership!
Resource Alert! The Consumer Financial Protection Bureau’s “Money as You Grow: Help for Parents and Caregivers” offers parents tips and activities to help children develop positive money skills, habits and attitudes. Start the money conversation!
The earlier children start learning to be financially responsible, the more likely they are to feel confident about their financial future. Truly understanding how money works and how to successfully manage it takes years, and parents and grandparents can start instilling the information in children when they are first learning about how money works. A savings account is more valuable than just giving children some money of their own — it can be used to teach them important life lessons.