Savings bank essentials that you need to teach your children

As a child, a human being is much more malleable than the later years. Hence these years are called the formative years. This is the best time to teach your kids the concept of savings and bank accounts. Opening a bank account is the first step that you need to take to educate your kid about savings.

Opening an account is very simple. All you need to do is co-sign for the kid to avoid all the complications involved in setting up an account. if he were to do it on his own, he will firstly need to be over the age of sixteen. Having an SSN is imperative if he or she cannot get a college letter stating the need for an account. a permanent address and telephone number are also other requirements.

After opening an account, you can impart a lot of important lessons through practice. The first thing to do is to teach them the concept of budgeting. Everybody needs to budget in order to sustain a decent living. You can help them understand the concept of budgeting by letting them sit in on family discussions about savings and expenditures. As a child, if you give your kid a fixed pocket money it will help him or her to understand how to save and budget. Even ten dollars a week is something that a very small child can cherish and plan with. And saving a little every now and then is another thing that children need to learn.

Using credit is another aspect that the kids need to learn. Using credit is not wrong, but the kid needs to learn how to use it. Using credit at times can result in a lot of savings in the long run and in fact you can invest in assets that pay more than the interest rate on the credit that you have taken out.

Knowing what to buy is another thing that one needs to learn. Debt is another thing that can eat into a life’s savings. You need to teach your children that debt can never be good if used for things that do not build an asset base.

Apart from these general lessons, you also need to impart other banking fundamentals to teenagers. You need to let them know about overdraft fees and how to avoid it, money transfers, how to work online accounts, and where to invest surplus funds if available.