4 Ways a Savings Account Teaches Kids About Money
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Whether your kids are saving their allowance or just need a place to stash birthday money, a youth savings account is a perfect opportunity to teach them about money.
1. Teach kids about banking tools and processes.
The experience gained by having a real bank account will build a valuable foundation for financial literacy. Meeting with tellers and financial services officers helps kids understand how banking works. Children can practice making transactions, learn about depositing checks and get in the habit of asking when they have questions. They can use the app, online banking or ask tellers for help to see how deposits and withdrawals impact their savings in real-time. And a bank account helps young people stop thinking about dollars and coins to be counted and begin thinking about money in the more abstract way of bank account balances at the credit union.
2. Help kids build good financial habits.
A youth account is a great way to encourage kids to save money, set goals and build a budget. Based on a study about financial habits in children, Dr. David Whitebread and Dr. Sue Bingham of The University of Cambridge tell us going to the bank and participating in “adult” activities are meaningful and motivating to children.
With a parent’s leadership, kids can learn to appreciate the value of saving their money by making regular deposits and watching their money grow. They can take pride in setting goals to save up for specific things like their first car or their next Xbox or Playstation. It also helps them learn the value of budgeting for smaller purchases. Earning and spending their own money may help kids prioritize the things they want to purchase a little better too.
3. Empower children to be good with money.
Letting children take control of their bank account and teaching them how to use it gives them the power to make good money decisions. Parents can still be involved and provide guidance while allowing kids to feel a sense of accomplishment.
4. Prepare teens to be financially stable adults.
All the activities that come with having a bank account help teenagers prepare to manage their own finances as adults. Starting at age 13, kids can open a checking account and begin using their own debit card to make purchases. In addition to giving them ready access to their money, it helps them learn the importance of managing their balance and keeping to a budget. Armed with real-life experience, teens will have a better opportunity to make good financial decisions as adults.
Ascend wants to help you educate your kids and teens about managing money. Visit any location to sit down with a financial services officer to open a new youth account or talk about finances. You can schedule an appointment or drop by at your convenience.