Having money in your bank is a powerful tool to pass along to your kids. When one decides to start a family, it’s a fact that they will need to make financial sacrifices because raising children is a costly endeavor. Some costs include college fees, buying birthday presents and going on vacation; hence, to comfortably raise the kids, one needs to have a workable saving plan. Saving money for your children depends on the goal, and here are things to consider when choosing the right saving accounts.
Open a Children Saving Account
Most credit unions and banks offer children-specific saving accounts, allowing parents to be co-owners. By opening a savings account, parents encourage children to learn a habit of saving instead of spending the little money they get. As the child grows, they graduate to teen checking accounts where they are issued debit cards. Parents remain co-owners, helping them learn money management skills as needed.
Opening a Custodial Account
A custodial account is ideal for parents who want to save money for their kids but only want them to access the savings when they are adults. Here, the accounts are opened in the child’s name, but parents can manage and deposit into the accounts until the child reaches a ripe age.
Teach Your Children the Value of Saving Money
While developing a savings plan such as opening a children’s savings account with banks or unions is essential, parents should not underestimate the power of teaching their kids how to save and invest no matter how young they are.