Managing money is a foundational life skill. There are so many factors involved and so many open-ended questions at play. How much should you be saving? When is it worth spending more? How do you keep spare change from burning a hole in your pocket? It takes years of discipline and training to perfect this skill, and ongoing self-control to maintain it.
That’s why it’s best to give your kids a head start on money management and saving by opening a youth account for them. As a parent or guardian, remember that the lessons you plant today will take root and blossom, enriching your child’s life for years to come. In honor of National Credit Union Youth Month, here are three steps to take for ensuring your child gets the most out of a new or existing savings account.
Set a goal
Once your child’s money is sitting safely in an account instead of a piggy bank, let them use this opportunity to save up for something big. Sit down with them and discuss what they’d like to save for. You can create a long-term goal, like saving up for college or for a first car. Also establish a short-term goal, like a new gaming console.
Set a date for your goals, and then set up a savings calendar for illustrating how much money needs to be saved each month to reach the intended target by the designated date. Discuss ways to add to the savings, being sure to include money from birthday gifts, summer jobs, allowances and chores.
Whether your child is a first-grader or a teenager, if this is their first time owning an account, they’ll need you to show them the ropes.
Always bring your children along with you when you stop by Scott Credit Union to deposit their savings. Show them how it works, and let them see the account balance growing. If your child asks you to withdraw money from their account, make sure they see how this translates into a dip into their savings.
For teens, you’ll need to walk them through that first deposit and withdrawal. When they’ve probably got the hang of it, it’s time to take a step back and let them be on their own. They’ll feel like a million bucks managing their account independently.
However, share with your teen that every withdrawal also means a dent in their account balance. Also, be sure to warn kids of all ages about security. They should know to never share their account information with anyone.
Monitor your child’s activity
Don’t aim to be a helicopter parent, but do keep an eye on your child’s account. If they’re depositing a lot less than planned, ask them where their money is going. If your teen is making frequent withdrawals, speak to them about money management and impulse purchases.
Scott Credit Union is proud to offer specialized savings accounts that are designed just for kids. We know that different ages and stages have different needs. That’s why we offer Big Barker Kidz Club accounts for children ages 0-12, as well as teen share savings accounts for ages 13-17. Our youth savings accounts offer no annual fees, the ability to easily monitor your child’s balance through our mobile app, and competitive interest rates to help you teach your child that saving money always pays.
More from the Banking Simplified Blog:
How to Raise Money-Smart Kids
Your Turn: How do you maximize the benefits of having a youth account for your child? Share your best tips and techniques with us in the comments!