What To Know About Saving For Children
Saving instead of spending everything is a very important habit to develop. Kids don’t have as much money as adults, but if they can develop this habit early, they should be better prepared for times when they have substantial funds. Here are some ideas that can support saving for children.
It is best for a child to have their own money to save. One could always deposit money directly into an account for the child, but the savings habit gets better reinforcement if the child is more involved. If possible, the child should use an ATM themselves, or go into a bank branch, to make the savings experience more concrete and memorable.
Both gifts and earned money can have a role in the child’s savings. Earning money gives more appreciation of its value. Gifts can give a significant boost to well being. Older children may be able to earn money from jobs. Younger ones may receive an allowance or earn money by doing chores.
Initially, money can be saved as cash. The well-known piggy bank, or other cash receptacle, can be a useful tool for younger children. At some point it will be appropriate to establish an actual bank account.
Most banks will not allow a minor to open an account on their own. A joint account with the child and an adult, preferably a parent, is a good approach. Obviously the adult would have to be reliable, and it is most straightforward to treat the balance as belonging solely to the child, though legally either party can access it.
In some cases a custodial account under the rules of the Uniform Transfers To Minors Act (UTMA) may be appropriate. With this type of account, the balance belongs to the child, but is not available to the child until a certain age, which is different in different states. The custodian is an adult who administers the account until the child reaches the required age.
Sometimes establishing a habit of saving for children is very easy to do, as many kids have a natural savings instinct that just needs some nurturing. Others may not have the required self discipline. These are the ones who need the most adult encouragement.
What do you think about the above? You are welcome to share your comment, experiences and questions below.
This is 63 pages worth of gold! This e-book will help you set your child on the right path for the future. Includes chapters on savings, budgeting, allowances, ways to make money for kids.
Also for the next 200 38 people that reserve their copy, you will receive 6 bonues completely free valued at $80!
- Teaching your Children to Have a Wealthy Mindset – extra chapter on how your child can be trained to increase their chance of becoming wealthy later on ($20 value: yours FREE)
- Why Money is So Important – another bonus chapter on why money affects everything we do ($19 value: yours FREE)
- Yearly Expense Planner – spreadsheet to calculate all expenses and savings throughout the year ($15 value: yours FREE)
- Simple Budget Planner – calculates what you intend to spend and how much you will save ($9 value: yours FREE)
- Printable Allowance Chart – easy to use chart to track your child’s allowance throughout the year ($9 value: yours FREE)
- Financial Planning for Kids – Checklist – a timeline to show you how to plan for your child’s finances ($8 value: yours FREE)
Price: $27