Teaching children the value of a dollar and good money management skills is the goal of many Milwaukee banks. By offering banking products such as youth savings accounts, these banks are helping today’s youth develop financial skills and showing them the benefits of saving money. If you’re a parent of a young child and want to start teaching them early about the value of saving, here are some tips to help you get started.
Banks Are Better than the Average Piggy Bank
You may already be telling your children that they need to save their birthday money and their allowance, but where is that money going? In most cases, it’s going into the shoebox on their desk or in that piggy bank on their dresser. Sure, that piggy may be getting fatter and fatter, but what would your children think if they knew that money could be saved in a manner that’s actually going to earn them money?
Yes. It’s true. The average youth savings account isn’t going to pay a lot of interest. The point, though, is that when the quarterly statement comes in the mail, and they see that their $20 has turned into $22.00, it teaches children that you can get rewarded for saving money. Everyone likes to be rewarded for their hard work, right?
Help Your Children Set Financial Goals
A financial goal for a small child could be saving for a new toy. Setting financial goals is important because the average person has to save for big ticket items. While parents want to give their children everything they possibly can, sometimes the better gift is teaching them how to manage their money so they can have the things they want in the future. Setting savings and spending goals when your children are younger will help them save for larger items like cars and college as they grow into young adults.
Show Preteens How to Monitor their Accounts
Banking isn’t only about saving money. It is also about understanding the process and paying close attention to how well their money is working for them. Preteens are old enough to understand simple concepts such as compound interest. Most banks have online calculators that make it easier to explain this concept to preteens.
Explain the Differences between Needs and Wants
Small children may have difficulty understanding this concept at first, but the more you discuss this topic the clearer it will become. Small children, preteens, teenagers, and – let’s be honest- even adults, often struggle with making these distinctions. Children who are taught from an early age the difference between needs and wants will be better able to manage their money as adults. They’ll be less likely to spend money on items that are not of value and save for something that truly matters like a new car, a home, and retirement.
Be Honest with Your Children about Your Finances
Healthy spending habits must be taught, and parents are their children’s first teachers. Having frank discussions about your financial situation can help your children gain financial empathy and enable them to take a different financial path. If you’re having financial struggles, you certainly don’t want to burden or worry your children unnecessarily. However, telling them that you have to use the money saved for a vacation to pay for a medical bill is illustrating the point that sometimes things come up and having money in the bank can help you meet these financial challenges.
Whether your child is 2 or 13, opening their first savings account is easy when you visit Milwaukee banks. The personal bankers at these institutions will answer all your questions and even give you even more tips to help your child save money.
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