Life Lessons: Teaching Kids to Manage a Bank Account
Is your child ready for his or her own bank account? A savings account can offer your child a little extra savings in interest as well as added responsibility, so if you hadn’t considered opening one with your child yet, this may be a good time to start researching your options.
Before opening a bank account, consider teaching your child about financial responsibility and trying some exercises that can measure how well your child understands budgeting. To kick off this lesson, take a look at the budgeting and financial responsibility worksheet below.
Once your child has completed the activities and has a good grasp of financial literacy, you may want to start considering his or her bank account options.
What to Look for in an Account
You’re going to want to do your research before opening a bank account for your child. But do you know what to look for?
Consider a savings account. When your child is in his or her late teens and is making bigger purchases, a checking account may be appropriate. But until then, why not think about opening an account that compounds a little interest and teaches the value of saving?
Accounts with no minimum balance or maintenance fees can be a favorable option, whether your child can make the minimum balance or not. The goal is to teach your child that saving money is a good thing, so having fees and requirements attached may send the wrong message.
Consider a savings account with an ATM card so your child can access his or her own money. Allowing your child access is a great opportunity to teach him or her self-control at an early age.
Choosing a Kids’ Bank Account
Do your research and keep your options open. You may have a go-to bank, but their kids’ savings account options may not be right for your child. Once you’ve decided on an account, set up a meeting at the local bank branch for you and your child.
Allow the customer representative to explain the account to your child, and make sure he or she is on board. You want your child to feel like he or she is part of the decision-making process.
What to Bring
You should also be prepared with any paperwork, information, or other materials the bank will need in order to set up this account. This will usually include your child’s:
- Social Security number
- Date of birth
- Email address
- Initial deposit
You may be able to find out exactly what you will need on the bank’s website, or you can call and check beforehand.
Ask the customer representative if the account statements can be mailed and addressed with your child’s name on them. That way, bank statements can be sent directly to your child, as well as to your email address.
You may want to buy your child a special binder for him or her to keep these account statements in one place. It can be a great opportunity to teach your child file-management and record-keeping skills.
Having your child open a bank account, learn to save, and keep records—doing these simple financial tasks together can be a “real life” lesson that helps start him or her on the path to good money management as an adult. How do you teach your child the value of saving? Let us know in the comments below!