Think it’s silly to open a bank account for your baby? Think again. There are a host of reasons why it’s a good idea to start a bank account for your little one. It’s never too early to start setting up your children for financial success in the future.
1. It Shows Them the Importance of Saving and Budgeting
According to SavingsAccounts.com, a savings account can help a child learn the value of money. They’ll know what it means to save for an item they want and they’ll learn about budgeting the money they have. Giving them decision-making scenarios in their early life will make it easier for them to make the right money decisions as adults.
2. It Can Help Pay for College
For children who are in a low-income or middle-income family, starting a savings account early means they may be able to help pay for their college education. This means that all throughout elementary, middle and high school, they’ll know that college is actually an attainable goal and not just a pipe dream. This helps kids to expect more from themselves and gives them something to work towards and look forward to. Plus, kids with savings accounts are more likely to not just go to college, but also to complete college. A lot of students end up dropping out of school midway through because they’re not able to pay tuition. When your child has a hefty savings account, they’ll be able to pay for their complete education or contribute as much is necessary.
3. It Prevents Frivolous Spending
If you don’t have a savings account for your child, what’s going to happen every time they get money for their birthday or for doing chores around the house? A savings account gives them somewhere to keep their money so that they’re not tempted to spend it right away. Encourage your kids to put their money away long-term and to keep a small portion out for spending or for saving up for a fun item.
4. They’ll Want to Continue Earning Money
When kids see how great it is to save up money and what it can mean for their life and their future, they’ll be more encouraged to make and save money as they get older. They’ll want to work so that they can earn more and, instead of spending it right away, they’ll stick to the habits they’ve developed since childhood and put it in a bank account.
5. It’s Good for Their Future
According to The Week, having a savings account for your child puts them on the right track for the future. Children with savings accounts are more likely to go to college, accrue assets and invest in stocks.
It’s important to speak with a financial advisor about the best way to invest your money for your child’s future.