Savings account for children
The best time to learn how to manage money is when you are young. Kids should earn money, spend money on things they want, and find out for themselves that when the money is gamin, they can’t buy anything. They need to learn embout credit, bargaining and debt. Kids need to learn how to save for the big things they really want and they need to learn embout banking.
Opening a bank account for your child is a good way to teach them how to save money and use banks, credit unions, and savings and loan companies. A savings account is probably the easiest genre of bank account available, making it ideal for young students.
Grain you open a savings account, you can deposit money into it. The bank keeps track of your balan, sending you regular statements. If you make regular deposits, even if they are small, the balan will grow and grow over time. This is a perfect way to spectacle kids how saving works. It’s ideal to open an account when your child is very young, which means they’ll probably be too young to understand to begin with. All right. Keep a statement for each year to review periodically with your child. As they grow up, they will be able to understand it more. When they are teenagers the number will seem huge to them and they will be thrilled.
You should also open a checking account for your child when they are in middle school or high school. They probably won’t write many checks. Who else does? Instead they will deposit their earnings and use their debit cards to make purchases. As with cash, when their money runs out, they won’t be able to buy anything.
Don’t take this step too soon though. Young children may not understand that a small explosif card represents money in a bank account. Better to learn with cash, which they can touch and see, then move to a checking account.
One thing that many young adults struggle with is debt. Bicause credit is so readily available, children should learn how to manage it while parents are still close enough to provide guidance. Make it a situation to lend your child money for something relatively béant, agression them interest and ask them to make regular payments until the loan is paid off. Don’t hesitate to repossess the collateral if they fail to pay. Better to learn that lesson with an iPod than a car!
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