One of the first things you can do to start your child off right, is to get them to start saving as soon as they possibly can. It’s common knowledge that the longer you save money, the more money you have saved up. It’s not very hard to figure out. Start early, and have the peace of mind knowing you are saving for your child’s future.
Once you have a savings account open for your child, you want to first check bank fees, interest rates, as well as different advantages your bank might have. Odds are you probably have a certain bank you already use and are familiar with, which means you are one step ahead.
After you have the account set up and ready to go, deposit some money into the account. This helps encourage your child and get them excited that they already have money saved up for them. The amount of money can be anywhere from $5-$500, whatever you decide is the best way to go. This will get a jump start to help your child start saving immediately.
Teach Your Child
Now that you have an account set up along with some start up money, you want to encourage your child to become involved in their finance and future. You may think they’re too young and they don’t need to worry about it, and that’s your individual decision. It’s always better in the long run to teach them money management early. The fact of the matter is that the sooner they start to manage and save their own money, the better they get at doing this.
Once they’re living on their own, they can then have the knowledge and experience it takes to make the most out of the money that they have. Make sure that they learn how to separate each paycheck they get into different accounts. You should always have more than one account so that you can keep track of finances better, and they will also only be able to spend what they have. By having them be financially strict over their money, they learn to do it on their own. In the end they will be responsible with their money, and also have money on the side saved for college or wherever their future leads. They learn the true value of money, which unfortunately most teenagers don’t learn until they are out of high school and start to have college debt start piling on.
After your child has had experience saving and managing their own money, they are ready to go a step higher. Almost all banks offer debit cards, which are much safer than a credit card is. They have a card that is almost exactly like a credit card, but they can only spend money from a certain account. Having a debit card, your child can now access money from an ATM. You can also put a limit on how much they spend per day, how much they withdrawal from the bank, etc. Having a debit card helps kids experience what it’s like to have a credit card, but without the risk. They can only spend the money certain places, have a certain amount they can spend or access at one time, and at the same time you can easily track it on your account.
Once you start your child with a savings account, you are on the path to teaching them how to become responsible with money as well as show them the true value of money. A lot of teenagers don’t experience this and leave high school with no knowledge of money management, and unprepared for their future. The sooner you start, the better chance you have at teaching them everything they need to know in order to be financially successful.