The world of banking can be a bit confusing for a child. When you talk with your kids about money, keep in a mind a few basic principles!
Save, Spend, and Share
When your child earns or receives money, it’s a great time to chat about saving, spending, and sharing. For example, if they have $20, discuss how they may want to put away at least $10 toward a long-term goal – maybe a toy they’ve been wishing for (save). With the remaining cash, $5 could be spent now on something fun (spend), and $5 could be given away to a church, a charity, or an organization important to the family (share). You can change these numbers as you see fit. The key is that your child is learning to organize his or her money and make small financial decisions, which will help create healthy financial habits down the road!
If your child has a savings account at a credit union or bank, it could be a great learning opportunity to visit the financial institution together and deposit some of their saved up money. This will provide the chance to talk about deposits, how banks and credit unions keep their money safe for them, and (depending on their age) that their money is federally insured up to a certain dollar amount.
In addition to keeping money safe, let your child know that banks and credit unions also pay dividends on the money in their savings account. If they continue making deposits to their account instead of into a piggy bank, they’ll make more money in the long-term without doing anything! Some kids accounts even offer fun rewards programs in addition to earning dividends.
If you’d like to begin teaching your kids these money basics now, FORUM offers various youth savings accounts to help you get started. Click here