If your child is under 10 years of age, you might not have paid much thought about opening up a bank account for him or her. As it turns out, however, parents are increasingly starting to look into the practice of taking their kids’ piggy bank savings to a real bank, and are using the experience as an educational moment to help their kids grow into financially knowledgeable and responsible adults.
Think about it, if you start early, by the time they’re old enough to get their first jobs and start saving money, they’ll benefit from having some working knowledge about how bank accounts and even investing work.
Here are a few things to consider if you’re thinking about introducing your child to the world of banking.
What Age?
It makes sense to stick to a piggy bank if your child is younger than 5 years of age, but once she starts to understand the principles of saving, storing, and short-term spending, it might be time to make a trip to a real bank to open up her first account.
What Kind of Account?
A savings account is probably a good way to introduce your child to banking. This will help to enforce the habit and importance of saving money before spending it.
Check with your financial institution to see their offering, but consider an account with no minimum balance requirement or monthly maintenance fees. You want as few complications when starting out as possible. Additionally you don’t want to discourage your child if fees are reducing the savings he or she is putting into the account.
What Should I Focus On?
Remember, this is an introduction to banking, not a reason to have your child spend as fast as they save. Teach your youngster how to check the balance on an account, how to put money in, take it out, or even move it around among different accounts. When you go shopping, show your child how saving could help them purchase what they want. Every month, go over the bank statements to teach her how to read those documents.
And even though most transactions happen online these days, taking your child into a branch as well as familiarizing her with using an ATM machine is a good idea. To practice transactions, you can use the money your child has earned through chores or checks she’s received as a birthday gift.
While all these technical things matter, one thing you can’t forget is explaining how everything works. Explain to him or her where the money goes, how the bank keeps it safe, and later on down the line, how interest works.
Make It Fun
Remember, you’re trying to show your child that responsible money habits don’t have to be boring and difficult. Make it a fun experience. Before going into a branch, connect with a rep and explain what you’re trying to do. You’d be surprised how helpful the banker can be in making the experience a pleasant one for your child. And once you get going, reinforce positive saving habits with freebies, extra money or other rewards.
It takes a little time and effort on your part, but instilling financial responsibility and teaching your children good money habits early on is an investment that’ll pay off big time down the line.
If you are interested in learning more, please stop by a branch or give us a call at 800-835-3400. We are here to help you on your financial journey.