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Planning for the future: Why you should set up a savings account for your kids

Planning for the future: Why you should set up a savings account for your kids

You may already be putting money aside each week to pay for your child’s future whether that be education, their first car or money to put towards their first home. Setting up a savings account for your kids even if it’s the smallest amount could make a powerful difference in their future.

There are many benefits of opening a savings account for a child. Including:

  • It teaches them to plan.
  • It teaches them to set goals and stay focused.
  • It shows how their money can grow, thanks to interest rates.
  • It teaches them to save for the things they want until they can afford it.
  • It teaches them the value of money and not to waste it.
  • They learn basic math skills.

With that all in mind, there are 5 important things to convince you why it’s a good idea to set up a savings account for your kids. Here are 4 things to consider:

  • It’s a reason to talk about money

Money isn’t always a fun topic and it’s one that people tend to avoid.  Opening a savings account for your kids has many benefits including opening a discussion about money from how to get it, what to do with it and why it’s important to save it.

  • It’s an opportunity to establish lifelong habits

How to use money wisely is one you are taught, most likely from your parents. So, with that in mind it’s important to encourage our kids to get into a healthy habit of saving money regularly, by teaching them this skill it’s one that they will have for life. If you’re not great at savings, then there is a high chance your kids will also learn this behaviour

  • Get your kids used to having money

Before you ask, the $2 that the tooth fairy leaves does not count! We are creatures of habit and we often strive whether consciously or subconsciously to create a situation for ourselves that is our version of normal. Make having savings normal for your kids.

  • It’s an opportunity to establish lifelong habits

By encouraging our kids to get into the habit of saving money regularly we are hopefully teaching them an important skill which they will have for life. Developing a habit of setting aside a bit of money each week and understanding you must sometimes wait and save up before you buy something are the two most important factors to set up for successful money management skills.

  • They will thank you one day

They may not thank you now but give them time to grow, mature and understand the value of money. By giving your kids an opportunity to start out with the right approach to money, we can guarantee they will thank you for it later.

So, how do you do it?

There are multiple options, depending on what bank you decide to go with when opening a savings account for your kids. Our advice is to put a small amount aside each week, whether that’s $2, $5 or $50, these funds will accumulate over time and lay a great foundation for your kids savings account.

Chat to one of our finance experts today who can guide you in the right direction.

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