It is never too early to put your kids on the path to savings; and your credit union can help you get started. Helping kids learn early about the importance of saving is an important step in heading off financial problems later.
You may be surprised to learn that not only are Americans struggling under the weight of crushing debt but spending has now outpaced saving. You can break this cycle, characterized by too many credit cards, large outstanding balances, late payments and over the limit fees by helping your child learn to manage his/her allowance or earnings right now...today, because there is no time like the present.
Many financial experts have been advocating the “save, share, spend” approach and families are getting on the bandwagon. Using this approach children divide money available to them into the above outlined categories.
In addition to helping children understand the value of a dollar this program can also help keep the family budget in line. Think how many times you have exceeded your budget purchasing those items your children ask for in grocery or department stores. Using the save, spend, share method, children save money toward the items on their wish lists and parents are relieved of the guilt they often feel when they must say no to a constant stream of budget busting requests.
Children can share a portion of the money available to them in a variety of ways. They may choose to give during the annual UNICEF drive or contribute funds to a local soup kitchen or disaster relief fund. This exercise can generate important family discussions and help children get some important perspective on their ability to make a difference in the life of another as well as engender appreciation of all the gifts life has to offer.
Your child can open a savings account at your local credit union or bank with as little as $5.00. Additionally, your financial institution may provide a special newsletter or other benefits that make the account fun and friendly for your budding financial wizard.
Very young children can start their “spend, save, share” plan using three jars or envelopes until they have enough money to open an account. As the parent or guardian you will likely be required to have or maintain a custodial account until your child reaches 18 years of age.
With available interest bearing accounts your child will be proud to watch her savings grow at attractive rates. Whether your child is saving for college, a car or the trip of a lifetime the credit union is the place to save and build good financial habits for the future.
