Learning about saving at a young age can make an enormous difference in a child’s life. The skills and habits formed around finances at a young age directly affect the ability to save up for larger items later in life such as cars and homes. Setting up a savings account for your child, grandchild, niece or nephew now teaches them responsibility, budgeting and planning. At Rocky Mountain Law Enforcement Federal Credit Union we want all our young members to get a head start in their financial future. Here is some advice regarding setting up a bank account for a child.
- When is a good time to open a bank account for a kid? – Right now! Seriously, the earlier the better. Give the child a place to store their money received from birthdays or earned from allowances. Help them set up spending goals for special items they may desire such as toys, video games, etc.
- What kind of account should I set up? – Typically we suggest setting them up a savings account. Make sure the savings account is free of fees and minimum balances! The last thing you want is to have a bank take their savings with extraneous fees. Savings accounts are also great tools to teach a child about earning interest. At RMLEFCU we have a great account for children. Please talk to us to learn more!
- How do I explain to my child where their money is going? – Explain to them that the Credit Union holds their money in a safe place. In return for holding their money, the Credit Union will pay them a small sum of money each month called interest. You can reinforce this by going over account statements each month or creating an interest example with round numbers. For example, if Julie deposits $20 now into an account that pays 10% interest, she will have $22 next month! Remember to keep the experience positive. It can be hard for kids to part with their money so encourage savings with positive reinforcement and make trips to RMLEFCU fun!
Jumpstart a child’s future with a savings account! This seemingly simple thing will promote a lifetime of good saving habits. Remember, we will deposit the first $5 into your child’s account and give a piggy bank to help get them started out on the right foot. We are looking forward to seeing you and your child soon!