One pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth. – Proverbs 13:7
At an early age, our saving and spending habits are developed. Parents can make saving a normal event for their children, which will help set them on the road to financial security. According to research conducted by the University of Kansas, opening a children’s bank account not only helps to make children more financially aware, but they will also be more likely to accrue assets, invest in the stock market, and graduate college. Additionally, children who have early access to savings accounts and the lessons that come from actively saving accumulate more assets on average and are four times more likely to invest in the stock market when they are adults. Children with access to savings accounts are also more likely to not only attend college but also complete college and graduate with a degree. College students with some type of savings built up to help out with tuition costs are less likely to drop out of college due to concerns about accumulating debt.
We all know that a child doesn’t have a job or a steady source of income. However, they likely receive money as gifts, allowances, or from doing odd chores. By having a children’s savings account, you can begin the conversation to help guide your child towards a secure financial future. This gives parents the opportunity to discuss how to balance spending/saving, saving for a goal, the difference between wants and needs, the power of compounded interest, and teaching the child how to monitor and manage their own bank account. Healthy spending and savings habits are not innate; they must be taught to children. Children’s savings accounts are the first step in teaching these habits to your children. It is important to have these conversations with your child at a young age before they do have more income available.
With children’s savings accounts, you can mould how your child looks at the future and give them the power that comes with having the safety net of a savings account.