Saving Money for Your Kids

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.

Tips to Teach Your Kids How to Save Money

Parents always want their kids to become financially independent and have a secure future. Hence, it’s important to teach the children about saving money, which is one aspect of wealth building. Many adults can attest that schools do not teach students the essence of saving money but learn through experience after realizing that we have to fend for ourselves. Here are tips on how to teach your children how to save money at a young age.

Use a Piggy Bank or Saving Jars

A saving jar or piggy bank is a good starting point when teaching your kids the importance of saving money. Parents tell their children to fill the piggy bank with coins and dollars until there is no more space left. If the kids want a new gadget or toy, ask them to assign a different saving jar for each item they need and ask them to make savings for each.

Open a Bank Account

After filling up the jar or piggy bank, open a savings account for them. Help them count how much they have saved before depositing the money into the account. You should sit down with the kids and come up with a saving timeline.