Today, many Americans are choosing to spend more and save less. While in the short term this can be a sustainable practice, ultimately it is a lot more prudent to set aside a little money in the event of emergency. Rates of saving appear to be dropping to all-time lows, but, by instilling in your children positive habits in regards to money, such as setting up a savings account for them, you can help to set them up for success while also helping to reverse this dangerous societal trend.
Breaking the Impulse to Spend
The impulse to spend can be seen in some kids as soon as they get an amount of cash in their hands. They may start talking about what they are going to spend that money on and demand their parents to take them to the store immediately.
What children often do not realize that by combining their earnings, they can start to afford nicer and more lasting things. This can mean, depending on your children’s age, the difference between a candy bar and a new video game or the difference between a few sets of designer clothes and a car or college education.
Though the novelty of having their own savings account may be enough to encourage some children to save a few dollars at first, some kids will need more motivation to save. As encouragement, parents can show their children how their savings can earn money on interest if they leave their savings alone and continue to add to it. You might also consider investing some your child’s savings in bonds to compound that effect.
The big expenses that children should be saving for can sometimes be met their by putting aside the pocket money they have earned from babysitting, doing chores or their regular allowance.
Opening Savings Accounts for Kids
Parents only need to make a small initial deposit to open a savings account for their child. Horizon Bank allows account holders to open a Sunny Savers savings account for their children with a minimum deposit of just one dollar. There is no minimum balance requirement, and no monthly service fees. It’s a great way to teach your child the importance of saving.