5 Benefits of Youth Savings Accounts
April 12, 2022
You could argue that a parent’s greatest responsibility is to help their children grow to become healthy, happy, successful adults. Personal finance is an essential life skill that is not taught conventionally in a classroom, therefore parents and guardians are likely the ones teaching kids about things like budgeting, saving, and the other basics about handling money.
Savings accounts, especially those designed specifically for kids, can provide many learning opportunities and help children develop essential skills that they’ll use for the rest of their lives. Check out these 5 ways your child can benefit from a savings account!
1. Healthy Relationships with Money
Children who learn at an early age about money management and real-world experiences are more likely to develop positive attitudes about money, and even their financial institutions. Teaching children to be comfortable handling and talking about money is important in their growth as adults. Even a small savings account for your child could make a powerful difference in their future!
2. Learn to Set Goals
Savings accounts that are designed specifically for kids often offer incentives and rewards for saving money, energizing kids to set saving goals for themselves. Having financial goals gives them reason to save their allowance, baby-sitting earnings, or birthday money. I’m sure you can remember your first big purchase as a child that you spent months saving up for – for me, it was a blue iPod Nano, and it was worth every penny.
3. Teach Financial Responsibility
Not only do we want to teach our kids how to save money for the things that want, but we also want to teach them the difference between “want” and “need.” Teaching children to be more thoughtful about their purchases will make them less likely to impulse buy as adults.
The most valuable money lesson my parents taught me as a child was to wait one whole month before spending my money on something. If I still wanted whatever it after a month, it may be worth spending the money. If not, just keep saving!
4. Learn to Invest
Watching your money grow with you is a great concept to learn as a child. This gives kids a sense of accomplishment and rewards them for saving!
Youth accounts teach children how to responsibly keep track of their money and how to set and achieve goals. Depositing money into a savings account and watching their balance grow with interest serves as an incentive to keep saving, and to keep their money safe in the bank! Plus, children with their own savings account have greater expectations to pursue a college degree, even if there’s less than $500 in the account!
5. Stepping Stones
Savings accounts for kids act as stepping stones as they approach adulthood! Understanding how their savings accounts work, as well as their financial institutions online banking tools and services, will get them ready for next steps such as opening a checking account, and eventually buying their first car.
If you haven’t already, start a savings account for your kids today! They may not grow up to be the next Bill Gates, but learning to save while they’re young can help them become financially responsible adults. Just remember – it’s never too early to start saving!
To learn more about Family First’s Youth Accounts, click here, or talk to a Financial Service Representative today!
Morgan started her banking career with Family First in 2018. She is a Financial Service Representative based out of our East Rochester branch and has worked alongside various departments and committees within the credit union, giving her an expansive set of skills and knowledge to help you reach your financial goals. She is committed to helping her members and community by offering financial guidance and support wherever she can, both within the credit union walls and out in the world.