How to Open and Help Manage Your Child’s First Bank Account

You could always train your child to be a more financially responsible individual even at his early age. According to most experts, it would be best if a child would develop the skills and determination in saving money earlier in life. You could be of help by opening and managing your child’s first bank account.

Before you finally go to the bank to open a savings account for your child, it would be best if you would educate him about money first. You could instill the financial discipline by introducing the concept of budgeting. Start by teaching him to spend his allowance responsibly.

You may ask your child to save a portion of his allowance each day. Warn him that if the money would be spent out completely, you may not give him additional allowance if he would need or want to buy anything. Tell him to save for whatever non-necessity item that he may like to buy, like a new toy or gadget.

Opening a Bank Account

Take your child to a bank. Together, make inquiries about specific savings deposit products that you could open for him. You could be surprised at how attractive banks’ offers are to entice juvenile accounts. In general, lenders consider juvenile savings accounts as nothing more than PR expenditures. They may view it as a strategy to create and lure their next-generation loyal customers.

Let the bank’s associate or personnel talk to your child about the accounts offered. Allow your child to make the decision over which product to take. This way, he would certainly feel more involved in this process. The bank account should be set in your child’s own name. Mail should be directly addressed to him. Your child would surely be ecstatic to receive his own bank statements.

You may also opt to set the structure of your child’s own bank account. There are products that facilitate splitting the account into two. One could be for the future savings while the other could be for short-term spending goals. Have your child constantly and regularly monitor his bank money.

Educating about Bank Savings

Educating your child about saving does not end there. You may start teaching him the value of saving and organising expenses. Tell him to allocate a specific portion of his daily allowance as savings. For instance, 30% of daily allowance could be a good start for savings.

Set a specific day of each week for visiting the bank to make deposits. This way, you could also monitor how well he is doing. Give small rewards if he makes savings bigger than his weekly target. Give warnings if the weekly savings fall below target, but try not to be punitive as well.

It may take some time before your child gets used to the process. Eventually, he would learn how to make deposits on his own. Every now and then, check the progress of your child in terms of saving. You could be surprised how he could eventually become more financially aware and responsible.

Andrew Black has contributed to many personal finance blogs on various topics. He believes it is crucial to teach kids how to manage money now, to ensure they will make the right financial decision later on. When he is not writing, Andrew helps people with low doc loans.

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