How To Educate Children On The Value Of Saving
The sooner you proactively educate children about how to manage their money, the more likely they’ll become financially savvy adults. Savings accounts for kids offer far more value than a place to deposit money. Here are few simple ways you can use savings for kids to teach them important lessons about money — and savings.
Seeing is believing. Kids learn the fundamentals of math with visual concepts that allow them to physically see the impact of adding and subtracting. For example, a teacher may show them a picture of 10 apples, and then remove two of them to visually illustrate that they will have eight apples left. These visuals allow kids to absorb the abstract concept of addition and subtraction by making it tangible. By seeing what happens when something in front of them is removed, they can grasp the impact of what remains. Savings accounts for children use the same concept. By giving kids the experience of taking cash to the bank, depositing it into their account and then watching the numbers increase as they make more deposits, they are able to see, feel and experience the benefits of financial addition.
Allow them to resist impulse purchases. Savings for kids is as much about seeing money grow as learning to make wise financial choices based on prioritized goals. Unlike a piggy bank or money in a jar that can be accessed on impulse, savings accounts for kids require children to take a series of steps in order to access their cash. When children go to the bank to withdraw their cash, they learn to slow down and think through the impact of their purchase — before buying on impulse.
Empower them to use money to their advantage. Saving money requires discipline, and the ability to differentiate a want from a need. Savings accounts for kids allow them to learn that they have control over money, based on the choices they make. As many adults learn, how much money you make is often not as important as how you choose to use it. When kids have their own accounts, they are empowered to set goals based on what they feel is important, and establish the self-discipline to make the choices required to reach them.
Demonstrate the power of consistency. Saving consistently is an important behavior that kids can learn by having their own savings accounts, even if they contribute only a small amount of money into their account every week or month. Little by little, they’ll see their balance grow, while absorbing an important fact of saving: Consistency is key. As they get older and start to earn money, the act of making consistent deposits can help them form positive financial habits. They’ll remember that “paying themselves first,” whether that means contributing to an emergency savings fund or their retirement account, is an important aspect of their money management strategy in adulthood.
Are your children ready to have savings accounts? If so, Liberty Bank has the perfect program for them — our All-Stars account. The account that educates with financial literacy tools and incentivizes kids (under 18 years of age) to earn $5 dollars for every report card with an “A”.
Contact us today to learn how Liberty Bank can help with your banking needs!