How To Work With Your Children On Saving

When your child's piggy bank or other money collecting device gets full, it may be time to open an account at the bank. A bank account allows children to keep track of money they have saved more easily. Here are some types of savings accounts that parents may want to consider.

A savings account can be started as soon as a child has money to put in one. Choose a day when you both have some free time and make a trip to your local branch of the bank. Talk to a teller or bank associate about starting an account for your child.

You and your child can open a statement savings account. This account gives both of you a monthly report of all account activity. It includes all of the deposits that your child has made into the account and all of the money that they have taken out of the account.

Read over the statement carefully with your child. Explain the various parts of the statement to them. Show them how much money they had and what they ended up with after interest payments and other account activity. Most statements list withdrawals and the date but not a detailed description of the transaction. You can write on the statement what each transaction was for so that the children get an idea of how they are spending their money.

You might also be able to get a passbook savings account. Each account holder is given a small "passbook", and the book is run through a machine which records all of your transactions. Your child can find out their balance right away, rather than waiting for a statement. Kids tend to like this, as they can look at their current transactions and balance whenever they want.

Aside from bank accounts, you can also go to a credit union to get a savings account. They offer accounts for children of their members, which are designed for children of different ages. When they get an account, they may also get an ATM card (with or without their photo on it) and other gifts for starting an account.

This ATM or debit card, can be used like cash by your child when they wish to buy something. Parents should keep the purchase receipts and teach children how to verify them against a statement each month. They should also be taught to deposit a percentage of their allowance.

If a child is under eighteen, some states will issue custodial savings accounts. These accounts list the parent's name as the account holder and the child's name underneath. The account ownership can be transferred to the child when they turn eighteen.

Children can keep track of their money much easier with the use of ATM/debit cards. You should greatly consider opening a savings account for your child, as they are a great tool for teaching them how to save and track and manage their money.

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