Preparing Your Child for a Strong Financial Future
Why it Matters to Teach Kids Early About Money
If you are the parent of a young child, you’ve probably wondered when it might be time to start talking to them about the importance of money and savings. The truth is, it’s never too early to teach your children about money, its value, and how to be smart when it comes to budgeting.
The behaviors that you form when building good financial habits – like organization, consistency, and critical thinking – are skills that will help children in many other areas of life. Games, books, and even opening a real savings account are just some of the ways you can prepare your child and set them up for success as adults. The more they understand as kids, the more likely they are to have healthy financial habits in the future.
Age-Appropriate Budgeting for Children
Depending on their age, you can take a variety of approaches to teaching your kids about budgeting. For toddlers and younger children, start with some fun and games. Try setting up a ‘grocery store’ that sells food or toys and giving them fake money – they can buy whatever they want as long as they don’t go over budget! This is also a good age to give kids a good old-fashioned piggy bank; they can learn the importance of savings one spare quarter at a time.
As kids grow up, around elementary and middle school, you can start to introduce them to real money and smart financial practices. Consider allotting them a small allowance in exchange for their chores. Encourage them to keep track of how much they spend versus how much they save; you can even work with them to create a monthly budget. This will give them real-world application skills for budgeting and saving money wisely.
Once kids enter their teenage years, it’s time to start speaking to them seriously about money. At this age, they can be ready for more responsibility when it comes to their savings. You can discuss the options for opening their own checking and savings accounts. Additionally, when a teen gets their license, it’s important for them to have a debit or credit card to pay for gas.
What Age Kids Should Open Their First Bank Account
Bank accounts can be opened at any age, but if a child is under the age of 18, the account must be opened and managed by a parent or guardian. Once they turn 18, they can open an account in their own name. A good option to start with is a custodial account; this account is controlled by the guardian until the child reaches a designated age (typically 18 or 21). Custodial accounts should be used for bigger savings goals, such as college tuition.
If you would like for your child to still have limited access to the funds within an account, consider if a joint account is right for you. Finally, as mentioned before, once your child becomes a teenager, it is a good time to introduce a checking account. This will require them to take responsibility for their spending and savings.
Ready to open an account for your child? Reach out to see how we can help. To learn more about your options, contact us today at https://www.peachstate.bank/contact-us.
Setting Up Kids' Savings Accounts for Success
When it comes to setting up savings accounts, earlier is always better. Be sure to research and find the best option for your child’s bank account. Ideally, there should be low (or no) minimum balance requirements, no monthly fees, and a high interest rate. To explore the different savings accounts offered by Peach State Bank, visit https://www.peachstate.bank/personal/savings.
Finally, teaching your child about the importance of healthy financial habits is one of the best ways to set them up for adulthood. Having open, clear, and consistent conversations about budgeting and spending will set them on a path toward success.