One of the greatest milestones in a child’s path to financial literacy is opening a bank account. That first bank account can give them a sense of responsibility, which they can build upon by securing a job or better honing their hobby skills, eg: crafting, baking for resale, to earn extra money. Whether your child is doing chores around the house, mowing the neighbour’s lawn or dog walking, putting money into their bank account and seeing that balance grow is a wonderful experience.
Opening an Account
Depending on their age, you as their parent or guardian, may need to assist them in opening and managing the bank account should they not be at an age to take control over their bank card and pin. You will also have to decide when – weekly or monthly and where – branch or internet deposits are made. Most banks charge a cash handling fee for in-branch deposits alternatively you may choose to use the banks online account option. Both options allow children to track the growth of their account through continuous deposits.
The requirements for opening a youth bank account may vary from bank to bank, so contact your bank directly for the exact details, prior to signing up. Generally, the following are the qualifying criteria:
Account benefits vary from bank to bank so compare account benefits, choose your preferred institution and choose the account that is best suited to your daily needs. Benefits can include, but are not limited to the following:
Teaching the Importance of Play Money
It is important to teach your children, not only the serious part of money – saving and living within one’s means but to also enjoy the money by having “play” money. Instead of having your child deposit their entire earnings, have them set aside 10 percent to buy or do whatever they want. This will make the tasks they have to perform to earn the money more rewarding and they will realise the payoff for all their efforts. Teach them that it’s OK to have fun with some of the money they earn.
A bank account is your child’s first step to financial responsibility as it can initially be used to deposit an allowance or chore money earned to save towards small buying presents, video games and in some instances purchase like a car. Formal employment takes that financial lesson to the next level. Teaching your child the importance of saving and growing their bank balance while keeping a percentage for play will give them a positive relationship and attitude towards their money that will serve them for a lifetime!