Teach Your Kids About Money with Their Own Bank Account

by Emily Guy Birken · 5 comments

My son is only 10 months old, but I have already spent a great deal of time thinking of ways I will help him to understand money and learn how to use it responsibly. Right now, that means I include him in my weekly checkbook balancing (he sits on my lap and tries to eat my pen) and I make sure all our spare change (half-jokingly referred to as his college fund) goes in his piggy bank to be deposited in his 529 every few months.

Someday, in what feels like the distant future, I’ll also set him up with his own kid-friendly bank account. Many banks offer savings accounts specifically designed for minors. Go ahead and start with your personal bank to find an account that will work for your child.

Here are some pointers on how to open up your child’s first savings account:

1. Make sure you find an account that truly is kid-friendly. One that does not charge minimum balance fees and offers a reasonable interest rate. Banks often view minor bank accounts as good investments on future customers, so you might be surprised at how good the incentives are.

2. Once you’ve researched an account, make an appointment for yourself and Junior with your bank to open up the account. Let the banker tell your child about all the benefits of this account and how the money can earn interest. By letting your child be the banking customer, you’re giving her a great sense of empowerment and excitement. Let her fill out the first deposit slip (and all the ones that follow, too) to really help her to feel in control of her money.

3. With your help, your child should come up with short and long-term savings goals for this account. You should both know what your child will plan to do with this money in the future.

4. Set it up so the account statements are addressed to your child, and make it a part of your money ritual to look over your child’s statement with him. This will help him learn what kind of information he can expect to receive from the bank, and it will give you a chance to help him learn how to reconcile accounts.

5. Make it a ritual to go to the bank together at least once a month to make deposits. Part of your little one’s allowance or gift money can go into this account to help grow her savings goals. Hopefully your child will view saving as fun by this point and will be thrilled to make deposits. If your little Diamond Jim is loathe to part with his money, pair the bank deposit ritual with another favorite activity, like walking to the park or taking a bike ride.

No one else will teach your child how to responsibly handle money, so it’s important to start these lessons early and to make them fun.

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  • MerCyn says:

    I did the three jars with my kids. One of the most eye-opening experiences for my son happened one day when he received his savings account statement. I don’t understand, he said, I have more money but I earned less…Nothing like a real life example to teach kids about interest rates.

  • Diane Kallal says:

    When I ws 5 years old, I opened my first account with $5 of pennies. My father later offered to match my savings, dollar for dollar, which was a huge incentive! He then showed me an amortization book, telling me the “evils” of interest. It was such an eye opener!

  • Greg Miliates says:

    I have 2 kids (my son is 10 and my daughter is 7), and instead of giving them allowance, we have them earn commission for doing jobs around the house. This teaches them that if they want money to buy something, they have to earn it; it also teaches entrepreneurial skills, such as identifying opportunities, negotiating their commission, and perhaps most important, that to get money, they need to do something to earn it.

    We also do the 3 jars (spending, saving, and sharing), and our kids are really engaged, seeing the money actually filling the jars.

  • Alex says:

    I think it’s a very strong and important point to involve your children in the process of opening an account and actively managing it.

    I know that when I was a kid, my parents had opened a savings account, and they would deposit some money on a monthly basis. They always told me, that I could have the money when I would turn 18, but I was never involved in the process. Guess what happened: I started spending most of it when I was 18. And I have never been a good money manager during most of my 20’s either.


  • Paula @ AffordAnything.org says:

    When kids are very young, it’s helpful to have 3 jars that they can put their money into: saving long-time, saving short-time, and spending.

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