Youth Accounts
(Continued)
Through goal setting, kids learn about hard work and delayed gratification. Saving money for the goal of being able to afford something like a new toy is a very tangible, concrete way to work on these skills and lessons.
Begin teaching financial basics. Saving for a financial goal also instructs kids about the basics of income, expenses, and value. If a child begins saving for something but quickly sees how much work and time it will take to earn and save enough money to purchase the item, they might rethink their goal, teaching them to think critically about what to spend money on and if it’s worth the price (i.e. a wise purchase). This is an important lesson in an age when many kids more often observe adults using credit cards to obtain goods and services and don’t see an obvious exchange of money for those goods and services.
Teach the value of investing. Investing and interest can be difficult concepts to teach—so why not show it at work on a saving account! With a youth saving account and online access to account balances, kids can see how they earn interest by having money in different kinds of saving accounts—the more money they have saved, the more interest they earn. Having a saving account also shows how saving early and regularly grows money and how even small amounts can add up—both when saving and spending.
Teach compassion and perspective. Using a saving (or checking) account to save money, watch it grow, and use it to buy things shows kids how financial resources are tied to what people have and don’t have, what they can afford and what they can’t. Kids can begin to understand that the things they and their family own are the result of planning, choices, and work. This will hopefully lead to more thoughtful decisions regarding their own spending choices.
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