How to set up a savings account for your children
It's never too early to start putting money away
It's never too early to start putting money away
It's never too early to start putting money away
If you have very young children, you might not think that they need a bank account just yet. But there맥스카지노s no better time than the present to begin socking money away for them. Having an account that is dedicated to your child맥스카지노s expenses means that you맥스카지노ll have funds to draw from for summer camps, violin lessons, a new sport or school trips. And eventually, they can use the funds for larger expenses, like a car, and ultimately, college.
Opening an Account
You could open a savings account at your current bank, but before you do that, it맥스카지노s worth taking the time to investigate your options. Nichol Beckstrand, president of , suggests asking yourself whether you want your minor to have access to their money and whether you want them to be able to receive gifts; those criteria will affect which type of account you choose.
Earning While You Save
Your money can grow over time. There are many online banks that offer high interest savings accounts, where you could earn 1.5% APY, or even higher in some cases. offers high-yield interest savings accounts with a rate of 1.6%, which is four times more than the national average, according to the company.
Limiting Your Access
There may be times when you need to withdraw funds from your child맥스카지노s account for purposes other than child-related expenses. Unless it맥스카지노s an emergency, Beckstrand advises against doing so. 맥스카지노Think about opening an account that you cannot automatically transfer out of 맥스카지노 limiting your own ability to spend the money helps to keep the savings intact,맥스카지노 he says. Obviously, if you absolutely need to withdraw from the account, do so, but pay it back when you can.
Teaching Responsibility
A bank account also presents a perfect opportunity to teach your child about money. Kids aren맥스카지노t born understanding how money works, and the concept of delayed gratification can be a challenge for them (and us!). "Take advantage of your influence as a financial role model and help kids learn basic concepts of finance and saving,맥스카지노 says Diane Morais, president of Consumer & Commercial Banking Products at , Once kids are ready for an allowance, show them how to divvy up their bounty between savings, sharing (i.e., for charity or gifts), and spending, she advises. 맥스카지노This can help even the youngest children learn self-discipline.".
Giving Kids Access
During the teen years, kids may start to have expenses of their own, so it맥스카지노s a good time for them to become familiar with how transacting and budgeting works. Morais suggests a pre-paid credit card for this purpose. 맥스카지노This way, teens can track how much they맥스카지노ve spent and how much they have left. Being able to manage electronic money can be a valuable skill when it맥스카지노s time for them to apply for their own accounts.맥스카지노 A debit card paired with the account you have set up for them is another option, but if you would rather not run the risk of your child dipping too heavily into that account, open a separate one with a debit card that is solely theirs.
Making Financial Gifts
If you or other family members are in a position to give your child financial gifts that you would like your child to have access to when they맥스카지노re of age, Tina McDonald, senior vice president at , a financial services company in Pennsylvania, recommends a Uniform Transfers to Minors Act (UTMA) account, which are offered by a number of banking and investment institutions, like Fidelity, Oppenheimer and Bank of America. 맥스카지노Parents are the custodian and have the ability to manage the account under the child's Social Security number,맥스카지노 she says. 맥스카지노This account format requires the custodian to hand over control of the assets to the child at anywhere from age 18 to 21, depending on the state.맥스카지노
No matter whether you have a newborn or a teen, it맥스카지노s never too early or too late to start saving. Do what you can, even if it맥스카지노s a few dollars a week, and add more when you are able. You 맥스카지노 and they 맥스카지노 will be happy you did.
For more money-saving tips, watch the related video above.