Kids these days are growing up with more access to financial products than ever before. From debit cards to mobile apps, they have so many options when it comes to managing their money. In honor of Youth Month, let’s take a look at why it can be a good idea to open a savings account for your child.
Teach the basics of saving
One of the most important lessons you can teach your child is the value of saving money. A savings account is a great tool to help your kid understand this concept. By depositing money into the account on a regular basis and watching it grow, your child will learn the importance of setting money aside for the future.
Teach kids about money management
A primary benefit of opening a savings account for your child is that it helps them learn about money management in a truly hands-on way. When your child has their own account and they control their spending to a degree, they’ll learn the importance of tracking their spending and setting money goals. They’ll also learn how to manage an account at a financial institution. This includes depositing money, tracking balances and will later evolve into using a debit card when they get their first checking account and more.
Help kids save for a short-term financial goal
Turn the lesson of smart savings into a lifelong habit by having your child use their account to practice saving up for a short-term goal. First, talk to your child about their financial wish list, and help them choose a realistic goal. Next, help them create a savings plan while using their account, which will help them reach their goal. Your kid can now set aside money they’ve earned from an allowance or part-time job, or that’s been gifted to them for a birthday or another occasion, until they have enough money saved in their account to fund their purchase.
Build credit early
A child at any age can have a savings account. Telcoe Federal Credit Union youth members can open a student checking account at the age 13 with an adult co-signer, this is the next step in your child’s financial journey, where they can now get the hands-on experience of practicing their money management skills. Once they turn 18, Telcoe offers a Credit Builder Loan and Secured Credit Card to help teach making monthly payments and establishing a positive credit history.
Prepare for the future
Starting a savings account and learning experience from a young age can prepare your child for unexpected expenses in the future. As they age, their needs and expenses will increase, and the more you can help them prepare now, the better off they’ll be in the future. For example, your child may need extra cash to pay for a video game, or when they’re a bit older, for a senior trip. Having money set aside for emergencies will teach them to be prepared for any financial reality. In addition, Telcoe offers scholarships to high school seniors for trade schools and college.
Build responsibility and independence
Having a savings account can also help your child build a sense of responsibility and independence. By managing their own money and making decisions about how to save and spend it, they’ll learn valuable life skills that will serve them well in adulthood.
Credit Union Youth Month is aimed to promote financial literacy and education among young people, helping them to develop good money management habits and achieve financial security as they grow into adulthood.
In today’s world, where financial literacy is increasingly important, it’s crucial to start teaching children about money management from an early age. A good way to teach kids about money is by teaching them about the importance of saving money, not only you’re helping them develop a savings habit, but also financial skills will serve them well throughout their lives. In addition, Telcoe Federal Credit Union has different resources to set your children on the path of financial success! Please give us a call or email Marketing@telcoe.com with any questions.
Youth Savings Accounts
Youth Certificates of Deposit
Student Checking Accounts
And much more....