Sue Scheff: Teach your kids the value of money with a joint savings account

There couldn't be a better time to prepare our kids by teaching them about how to budget, save and be responsible with money.

Source: Examiner

Teach your kids the value of money with a joint savings account
By: Lanae Paaverud

It is important to teach children the value of money, starting at an early age. When your child gets money, do you let them spend it all? Do you have them put half aside?

Saving and spending habits start to root as soon as your child has it in their hands. By the time they are teens you can tell which children were allowed to do what they want with their cash versus the ones who had reinforcement from home about saving and spending wisely. Sure we all goof up once in a while, but if your foundation is solid enough you won't tumble.

When your child is able to understand the basics of saving and spending, open up a joint savings account for them. Many banks have special accounts where no minimum balance is needed, and having your name on the account insures safety of the account's activities, especially as your child gets older. Let them be part of depositing money they have received, and watching their balance grow. Only allow for withdrawals after you have discussed with them the whole picture: what is the item, why do they feel they should withdraw for it, and do they realize what their new balance will be? Sorry, money really does not grow on trees, and it will not magically reproduce in your account after you take some out.

I would suggest only allowing withdraws for items that are substantial, meaning not for toys, movies, etc. Perhaps it's for a t.v., sound system, laptop, or even a car when they are of driving age.

An important reminder: In many cases, once your child turns 18, the "no minimum balance required" rule goes out the window, and normal bank fees may apply. Be sure to find out the rules at your bank.

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