how to help your children build their savings
Saving money is difficult for all ages, that's why it's so essential to teach our children the importance of saving money while they’re young! Studies show that at the end of 2021, 61% of American adults were living paycheck to paycheck. Every parent desires to see their child succeed and live a healthy life – that includes healthy financial habits! Read on to see some easy, fun, and practical ways that you can help your child build their savings account.
Every new parent, at some point, is asked the following question- ‘What should we get your child for their birthday?’ And while the gift is a nice gesture – the endless toys add up. What if there was a way to cut the clutter and invest in your child on their birthday?
No toys. That’s right; We said no toys. It's standard for family and friends to want to buy your children new toys or clothes for their birthday or other holidays. But for most families, are toys needed? Toys cost money. And most toys only last a few months, maybe a year if you’re lucky, and then parents are left with sorting through toys to donate or throw away.
What if instead of spending money on toys - family and friends gifted cash toward the child’s savings account every year?
Let’s break this down - if just one relative or friend gifted ten dollars every year for eighteen years, that's $180 before interest in the child’s savings account. Now consider if even five family members each gifted ten dollars every year. Now the child’s savings account is up to $900! By the time the child turns 18, they'll have a small savings account ready to help them in their next steps in becoming an adult. Whether that's going to college, a trade school, or living independently.
The next time a family member asks what they should get your child for their birthday, maybe ask them to deposit it into your child’s youth savings account at BlueOx!
pro tip: Open a certificate of deposit for your child. Certificate Accounts offer competitive dividend rates for those seeking to earn more on their savings for more extended periods of time – anywhere from three months to five years.
set savings goals
Setting financial goals is a good practice for anyone at any stage of life. Has your child been begging you for a particular toy or trip that's a little more expensive? Have a conversation with your child about how much this item costs and create a plan with them to save up for it.
At first, you may choose to work to save up for the item alongside your child by depositing some change towards the goal or even agreeing to match the amount they deposit. But eventually, this act of saving up will teach your child the basics of how money really works, and they can begin to take ownership of their own finances. The older they get, the loftier the goals may become, but it's important to encourage your children to keep saving and working to reach their goals!
pro tip: Keep the funds your child is saving in a safe place – like their own personal bank account! Your child can then have access to a Mobile App or Online Banking where they can keep track of how close they are to achieving their goals.
make it fun!
Financial literacy and saving money doesn’t need to be a boring concept for children to learn. There are so many creative and fun ways for children to save their money!
Check out some of these fun ideas:
- Play a Game – There are many financial literacy games for children to play. Everything from Monopoly, playing ‘store’ at home, or even online educational games!
- Make it a Race – The last one to save $100 is a rotten egg! Hold a competition or race each month to see who can save up the most money. Your child can earn money through chores or side jobs like walking dogs or babysitting. You can even offer a prize to the winner, like an extra $5 or $10, in their savings account!
- Make a Money Saving Chart – Some children are visual learners. Create a chart that can be filled in as your child gets closer to their goal. Each section of the chart would account for $1 saved, and so on. This is a great way to keep track of their savings and allow your child to physically see how much they’re saving.
It’s never too early or too late to start teaching our children good financial habits. It may sound like a daunting task – but it doesn’t have to be! With creativity, effort, a little time, and consistency, you can help instill strong and healthy financial habits in your children, raising them to be well-equipped for life's challenges.
Start saving today by opening a Youth Savings Account for your child at BlueOx. Working together with parents and grandparents, we can help your special young people to become successful money managers while also having fun!
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