Have you thought about opening a savings account for your child? This milestone can be an invaluable introduction to the world of personal finance and will acquaint your child with the most important aspect of money – saving. Teaching your child about financial responsibility at an early age provides crucial knowledge that can help introduce them to a complex topic; and considering the massive economic problems affecting many Americans, the importance of financial literacy cannot be overstated. Since most school systems spend little time addressing the issue, it’s up to you as a parent to make sure your son or daughter is equipped with adequate knowledge, and opening a savings account is one of the easiest ways to do so.
Understanding money at an early age
Many of us may remember the first time we walked inside a post office and placed a stamp on an envelope, inserted it into the out-going mail slot and watched it slide down the other side. Moments like these stay with us and shape the way we approach adult responsibilities. An elementary- or middle school-aged child is just the right age to benefit in such a way from opening a savings account. The earlier a child is introduced to the concept of savings and associating it with the physical act of depositing money for safe-keeping, the better equipped she will be to make healthy financial decisions throughout the rest of their life.
Plan the experience ahead of time
The best way to make a big impression on your child is to make arrangements prior to your visit. Consult with a representative at your local financial institution and let them know that you wish to open a savings account for your child, but you want them to treat your child just as if she were an adult member. Your local credit union is a great choice since they are more likely to dedicate time to helping you and your child to make the experience fun and engaging. Additionally, by choosing a credit union, you can also instill the importance of supporting local businesses. And MCCU offers Youth accounts where the child is the primary owner (a legal guardian must be a joint owner), giving them the confidence and pride to have their own account.
Let your child be in charge
Depending on how comfortable your child is in front of others, provide guidance but allow them to be in the driver’s seat of opening their own savings account. If they are comfortable jumping right in and speaking with the credit union representative, plan on simply standing by as support. If they are shy around others, you’ll want to take the time to explain what is happening so they are not nervous or overwhelmed. It’s important that your child interacts directly with the representative and that the process doesn’t seem too intimidating.
Help them set their own financial goals
Once your child has opened a savings account, don’t let the lesson stop there. You can further enhance their understanding of the value of money by helping them write down financial goals. For example, say your child wants to buy a new bike or video game console. You can help them come up with a savings goal and post a calendar on the fridge with savings levels for each month. Encourage your child to put their allowance, birthday money and other gifts inside a piggy bank, and at the end of the month you both can take the piggy bank down to the credit union to make a deposit. Give them a small prize each time they reach a monthly savings level, and when they finally saves enough, your child will feel empowered to know they bought the bike on their own. When you open a Little Savers account at MCCU, your child will get their very own piggy bank!
Also, consider sharing your financial life with your child by allowing them to see your own monthly budgeting process and post a savings calendar on the fridge right alongside theirs!
Helping your children understand money and make financial goals at an early age will go a long way toward helping them avoid some of today’s most common economical pitfalls. The experience of opening a savings account at an early age will instill the concept of savings and foster essential skills to make good financial decisions in the future. Create an experience for your child that is memorable enough that they might even pass it on to their own children!
Get more information on MCCU’s Youth Accounts today! Deposit only $5 to open and start earning interest!
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