7 reasons why you should let your children start a savings account
Parents sometimes underestimate their role in educating and guiding their children about money matters. The truth is an adult spending behaviour can be traced from their spending habits as children. How well or badly they manage their money now depends on how they were taught to handle it from an early age.
Parents might have taught children about the importance of saving by giving piggybanks. And though piggybanks and money jars are effective at some point, they do not realize that this is just the first step. Putting money in a piggybank only stores money but it does not make it grow into a more fruitful investment. Children only learn about where to keep their savings but do not really know what to do with them after the piggybanks are full. Thus, it is advisable for all parents to consider letting their children start their very own savings account.
Letting your children start a savings account can be a very important moment in their lives, as well as yours. Your children will reap multiple rewards of having a savings account, and you will begin to see your children slowly become young adults. Some of these rewards include:
Acquire basic financial literacy. Children learn about what it means to pay and earn interest, to balance a checkbook, and other monetary concepts.
Learn about the value of money. Starting a savings account gives children a better understanding about the value of money why we use it, and how and when to use it.
Gain self-control. Since they are now in control of their expenses, children learn about staying within budgets and forgoing frivolous purchases.
Gain independence. Responsibilities challenge children and build their character. At some point, children will be paying their own rents and bills, and they need to have the financial knowledge and confidence to survive the real world. Teaching them how to handle money early on prevents dependence on their parents.
Develop long-term saving money habits. Just like any other sport, money management also needs a lot of practice and experience. Starting early would let children harness their budgeting and saving skills, which they can take with them as they grow up.
Learn basic bank procedures. The more they use bank services, the more they will be comfortable and familiar with it. In the future, they will know what to do when faced with a financial problem, or whom they can run to for financial inquiries and assistance.
Save for future plans. Assuming you create an account where your children cannot withdraw money without your consent, the money they gradually save, and let grow, over the years can be used to pay for their college education fees or even business capital.
Most banks offer a children saving account for those as young as 6 to 10 years old. You should look into thesedifferent types of savings accounts and compare notes. Inquire about the different fees, requirements, interest rates, and other important matters included in the program. At the end of they day, letting your child start their own savings account is great news but do also check which one has the most suitable system for you and your child.