Gone are the days when a couple of dollars pocket-money would buy a bag of lollies, a lucky-dip at the toy shop and still leave some change to put in the piggy bank. Kids are growing up in a much more financially driven society where expenses are higher and money management is a survival skill.
In order to equip their kids with the knowledge and skills they will need in order to lead a successful and secure life, many parents are now giving their kids a head start by teaching them about how to save their money from an early age. More and more mums and dads are opening up savings accounts with their banks for their child. But what are the advantages and is this really a more worthwhile route than the piggy bank?
Making Money Fun
Many banks have clubs and promotions aimed at the young banker – often offering rewards systems and fun activities which appeal to children in a positive way while, at the same time, educating kids about money and banking. Kids are encouraged to save their money with fun rewards for depositing. In this way, it’s possible for young savers to feel a direct satisfaction in putting their money into a safe place and experience a tangible benefit to money management.
Building a Nest Egg
There’s another benefit to opening up a bank account for your kids, and it’s a much more obvious and measurable one: you’ll be saving money for your children to use when they need it.
Instead of popping dollars and cents into a coin jar, it’s going somewhere it’s bound not to be wasted or spent frivolously. This is great for your kids, of course, because once they need the money, let’s say, for their first car, they’ve been saving a long time for it and they’ve actually got something that’s theirs.
Furthermore, however, this is fantastic for parents, because when it comes time for that first car, it’s not coming out of mum and dad’s pocket – at least, not directly.
In addition, when the money spent is money saved up over a long period and when there’s a sense of ownership over what has been purchased with this precious reserve, the value is much greater and the sense of appreciation and responsibility is an important part of the saving and purchasing process which has its own inherent value.
Planning for Their Financial Future
By teaching kids about money while they are young, parents lay down a strong foundation for financial literacy in later life.
By nurturing an interest in financial management, parents open up many avenues to ensure that their child will be competent with money and confident in the exploration of their financial options.
This confidence may even carry through into the management of debt later in life, an invaluable skill, making solutions like debt consolidation loans a known possibility rather than a foreign term. If a person grows up with the confidence to deal with financial institutions and the understanding of the way their money works, perhaps a trip to a reputable debt consolidation loans provider will be far more likely than filing for bankruptcy or approaching a loan shark.
That’s what makes money management a survival skill for modern members of society; it’s the difference it makes if you’re unlucky enough to get into trouble, and the ability to avoid getting into trouble at all.
All in all, there are so many benefits to opening an account for your kids to accumulate their allowance. There are lessons to be learned and even fun to be had, and lots of positives for parents too. It all comes down to personal preference, but the pros certainly outweigh the cons when there’s no detriment to speak of. This is why so many parents are doing just that.