Preparing our kids for financial success might be easier today than what we usually think. It starts with the early age when kids should be taught the value of money. The saving account could begin with adding spare change received on birthdays and holiday gifts.
I know only new age parents think its important to open an account for their child. But every relative, friend, colleague should support this effort. And this lets your babies to become responsible. Rather than saving it for the child’s future, let your child grow up with a sense of responsibility.
Such savings may have some restrictions. Some banks have the rule of a minimum years of age. Some banks allow majors to open an account in the name of a minor. Most of the parents will observe that it is easy for them to open a minor’s account for having a pre-existing relationship.
Saving might be a good option but it is hard. This brings in a sense of saving in your child. Taking your child on a tour of the bank and showing them how a bank works may be an experience worth the while. Once they see it they would realize that the money is being taken care of and the bank would continue to take care of it till they are old enough. You can teach your child how to track the balance of their account or you can track it down and show it to them. This way they would get a feeling of security.
It is a work of patience but it would pay off. Your child would grow up to be financially concerned and independent person.
Type of account you can open for your child
The savings account has a lot of facilities. Like you can carry many transactions at the same time. Let your kid go and deposit or withdraw money from his own account. By this your kid would know the amount he/she is spending. Hence at a very tender age your kid would start saving.
Invest to earn more
At every investment you get an amount of interest which is again deposited in the account. The more the investment the better the interest. Let your kid deposit the money which he/she earns doing small works. The interest would obviously be low. But as your child grows, the earning would increase as well as the expenditure. This would make him learn to deposit higher amount to get higher interest.
Protecting the Future
What is more better than starting an account for your child at a young age? The child would be more responsible, would have a sense of financial concern, would save and would try earning and saving at a very young age.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.