Why You Should Open A Child Savings Account
As parents we are always looking out for the welfare of our children. We make sure they have enough to eat, clean clothes to wear, and a good education. One thing that often gets overlooked though is helping them achieve a strong financial footing when they grow up. Opening a child savings account can be a good way to ensure their financial security later in life.
Opening an account for your children while they are still young accomplishes a few goals. First of all, you won’t have to deposit a lot of money weekly, or monthly, to have a very large nest egg for your kids when they need it. If you start early enough by the time they’re ready for college you could have thousands of dollars saved even if you were only able to make small deposits and didn’t receive a very high interest rate.
Another benefit of opening an account for your kids is that you are teaching them sound financial habits from a very early age. Most kids don’t get much financial education at school or at home. This puts them at risk when they go off to college and the credit card companies are there just waiting to sign them up for a credit card. That is the first step to financial problems for many young people. They simply don’t have the knowledge to handle credit and they quickly get in over their heads.
As soon as your child is old enough encourage them to participate in the banking process. Take them to the bank when you make a deposit, show them how to fill out a deposit slip, encourage them to put a little into their savings account whenever they get some money for birthdays or holidays, etc.
One word of caution: saving is a good financial habit to start but you don’t want your kid to grow up with a feeling of scarcity or lack. You want them to understand that having their own cash to use if something unexpected comes up is true freedom but you don’t want them always thinking about and preparing for the ‘worst’.
Make sure they keep their saving habits in balance. They need to be able to spend their money occasionally too. That’s the only way they’ll learn how to be savvy shoppers later in life, and they need to learn that money, and to a degree, things can be a good thing to have. It’s a reward for working hard at a job.
Helping your child achieve a secure financial future can start with such a simple thing as opening a child savings account while they are still young. Teach them strong financial habits from an early age and they will be far less likely to get in over their head when they are an adult.
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