Teaching your child(ren) to save can help them develop critical financial management skills that will benefit them in adulthood. As the cost of living continues to climb, financial literacy is essential for the future independence of your child(ren). Whatever the objective of opening a savings account for your child(ren) may be, here are some tips to help get you started.
Open a joint-savings account specifically for your child(ren)
If your children do not have a savings account yet, start by opening them a savings account. The account will be joint with your name on it, giving you primary access and visibility into the account. One of the most important things to keep in mind when opening the account for your child is to foster their sense of ownership. You want them to feel a sense of pride that the account includes their name and is dedicated to their saving needs. Of course you can help by giving them a deposit boost to get them started and meet any minimum account opening amounts!
Educate your children on the value of saving
To build strong savings skills, it is important that your child understands the value of saving. Set aside a dedicated amount of time to have a conversation with your child(ren) in an area of your home with the least number of distractions possible. Start by providing a brief overview of how you approach saving to ensure you can take care of their need and the needs of your family. Remember your children aren’t looking for you to be on a soapbox, so keep it brief! Promptly shift the conversation to be more lighthearted - share how you are required to save to be able to purchase toys they want or activities they’d like to participate in. Explain that you want to teach them how to save money so they can achieve their financial goals and be prepared to manage finances when they become an adult.
Start saving early
When it comes to saving, building habits is crucial. First, establish a minimum savings amount or percentage that you will require your child to save of any money they receive. For young children, this could include any money earned from chores, allowance, or received as gifts from family and friends. Once you’ve established a set-savings proportion, be sure to write it down with your child and placing it somewhere they will see it frequently such as their bathroom mirror or the fridge. As the adult, it is your responsibility to remind your child of their savings allocation each time they earn or receive money! Savings can be hard for all of us, after you visit the bank to deposit their savings, remind your child of the reasons it’s important to save.
Teaching your child(ren) to save can have a major positive impact on their finances as adults. They will learn to plan and set goals for their money. It will foster a better understanding of how a deposit account works and how their savings can accrue interest. A personal savings account with limited access also develops financial discipline for your child(ren).
So start saving and encourage responsible spending habits. One day your child(ren) will thank you for it!