It’s never too early to teach your kids about money. The earlier you teach them about savings, the better off they’ll be as they age. Schools don’t teach practical information to help students budget, spend wisely, and put back what they can afford. Start a savings account for your kiddo, even a small one, to teach invaluable lessons that stick into adulthood.
Saving up for what you want
Savings accounts show children the value of saving up for what they want. Setting up an account for a kid allows her or him to realize that almost everything costs money. That money has to originate from somewhere. You can use the bank statement to detail what goes into and what comes out of the account.
Setting practical savings goals
Kids need to know how to set realistic goals, as well. Your 6-year-old can’t save up for a trip to Disney World himself, but he can put back money for a souvenir he wants. This will also teach children the value of money. They will see that $100 doesn’t necessarily stretch that far although it seems like a spectacular sum.
Budgeting for the necessities
A savings account teaches valuable lessons in budgeting, something that comes in handy during the teenage years and beyond. Understanding the differences between what they need and what they simply want is essential for children. It allows kids to discover that clothing, for example, is worth more than candy in the long run.
Explaining interest rates
Some adults don’t understand the ins and outs of interest rates. Protect your child from that financial faux pas. Explain what interest is and how it affects the money in their savings account. Help your children to comprehend that the more money they save, the more they earn over time.
Creating engaging financial plans
Because a savings account is there in black and white, you can advise your children in ways that stick. Come up with engaging, interesting little lesson plans. Start small. Invite your child to save up for a toy or a game. Give your kiddo an allowance each week for a set number of chores, and let the fun begin.