Introducing your child to his or her very own savings account is a huge step in developing his or her mature spending, but when is the right time to do that? You have to consider three things: your child’s spending habits, his or her goals when it comes to what he or she wants to save, and of course, your child’s responsibility.
Your child’s spending habits decides whether he or she is ready to have a savings account. Most accounts come with extra features like an ATM card. This is great in times of emergency, but what if your child spends too much? The temptation may set in for your child to use the card for unimportant expenses. If you feel your child has this spending habit, then you may reconsider opening a savings account for him or her.
Next, what are your child’s goals when it comes to saving? Does he or she want to focus on short term goals or long term expectations? This helps you decide if your child has the capacity to save for that specific goal, which would teach him or her discipline and proper spending habits. If your child wants to limit his or her scope to the present, then he or she may need to learn a bit more before he or she is given a savings account.
Thirdly, your child needs to be responsible if he or she were to receive a bank account. If you expect your child to put his or her ATM card anywhere or spend it too loosely, then he or she isn’t responsible enough.
It’s true that having a savings account gives your child that thrilling experience of active saving and spending, but you should make sure your child is up to the task. The lessons your child needs to learn may come in effect with the savings account, but precaution is always the safest option, right?