Here's when to start teaching your kids about online banking.
Part of your job as a parent is to prepare your kids for the future. One important component of their future is learning how to handle money. Yes, financial literacy can seem daunting and complex, but you can start small by introducing your young kids to simple concepts like saving money in an online savings account. Here is a guide to help you start talking about finances with your kids.
Younger than six
If your child is younger than six, they may not understand what an online banking account is, even if they are tech savvy like many kids today. However, they will understand a physical representation of their savings efforts, such as a traditional piggy bank. You can even let them pick out the bank; it does not have to be a pig. They will enjoy dropping in coins or dollars they receive for birthdays, holidays, or age-appropriate chores. Plus, they will be able to see their savings grow until you allow them to buy something special for themselves at the store.
Ready for the next step
Once the piggy bank savings method has lost its appeal or your child’s interest, it could be a good time to go high tech. Online savings offers 24/7 access, so you can choose a time that is convenient for you and your child to discuss money. There is no need to wait in a crowded lobby or deal with an appointment time that adds stress to your schedule and your child’s nerves.
Kid-focused accounts
Most likely, the financial institution you trust with your grown-up money offers a kid-friendly savings account. If not, a little research should help you find a suitable option for your child’s hard-earned money. A youth savings account can help build your child’s balance or give them a place to deposit income from an allowance or part-time job, while also giving them an opportunity to earn interest and learn how to bank responsibly.
What to look for in an online savings account
The interest rate is not the only thing you should consider when choosing an online savings account for your child. Although a high-interest rate is an attractive feature and may inspire your child to save as much as possible, check to make sure the account does not require monthly maintenance fees or a minimum balance before committing. Children should see saving as a good thing, and fees should not reduce what they put into their accounts.
Kids have limited attention spans. To keep their focus on money-saving habits and make your lessons enjoyable and useful, choose an online savings account that is easy to use, view, and access. Look for features such as mobile apps and electronic statements. Other helpful features may include goal-oriented budgets, spending trackers, and a prepaid debit card. You can also show your child how to create a secure password, which helps teach both money management and internet safety.
Some apps offer parental controls so you can monitor how much your child spends and transfer money directly into their account.
By talking to your children about money, saving, and accounts early, you can inspire them to make smart money moves throughout their lives.
Check out our Financial Education Hub for more helpful tips.
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