Most Important Saving Money For Kids — Savings Account
Saving money for kids or better yet teaching kids about saving money is one of the most important things you can do if you want to get them off on the right foot.
So, how do you go about teaching kids to save money? Well you have to convince them it is a good idea.
1. Show Them The Power of Compound Interest
Let your kids see how fast their money can grow over time. Why spend $5 today when you can have $10 tomorrow? By constantly saving your money and investing it you can build real wealth and accomplish your financial goals.
Here is a link to a page with a fantastic compound interest calculator that you can share with your kids and use to teach them just how powerful it can be to keep saving money for the long term.
2. Save Money Yourself
How many of us wake up and figure out that we turned into our parents?
We learn by example. The whole, “do as I say not as I do” argument is not going to work on anything that you are serious about teaching your kids.
If you start teaching your kids about saving money and then go in debt to remodel the house guess what you are really teaching them. You are not teaching your kids to save money but to spend it and borrow more whenever you run out.
Start practicing what you preach, and show them that you do save your money. Do it while they still think you know everything!
3. Get Your Kids Started
Finally get your kids started with their first savings account. Banks will let you open up a savings account for a teenager as long as they have a parent cosigner with them.
Opening a savings account and rolling it into a C.D. may not give you the huge returns you are looking for, but it is the perfect place to start your kids off on the right foot.
Another thing you can do is to open up a 529 plan. This way both you and your kids can start saving money for your kids college fund and any interest you make on the money is tax free provided it is used for school. College will be here before you know it, so you had better be ready.
Finally buying U.S. Savings Bonds for kids can help them get off on the right foot and learn the importance of letting their money grow, long term. Minors can hold U.S. Savings Bonds and they usually come with a higher interest rate then C.D.s which makes them a perfect place for kids to start investing their money and getting in the habit of doing it consistently.
Bottom line, when saving money for kids teach them how cool it is and how much of an impact it really can have on their future. Then lead by example.
Saving money for kids or better yet teaching kids about saving money is one of the most important things you can do if you want to get them off on the right foot.
So, how do you go about teaching kids to save money? Well you have to convince them it is a good idea.
1. Show Them The Power of Compound Interest
Here is a link to a page with a fantastic compound interest calculator that you can share with your kids and use to teach them just how powerful it can be to keep saving money for the long term.
2. Save Money Yourself
How many of us wake up and figure out that we turned into our parents?
We learn by example. The whole, “do as I say not as I do” argument is not going to work on anything that you are serious about teaching your kids.
If you start teaching your kids about saving money and then go in debt to remodel the house guess what you are really teaching them. You are not teaching your kids to save money but to spend it and borrow more whenever you run out.
Start practicing what you preach, and show them that you do save your money. Do it while they still think you know everything!
3. Get Your Kids Started
Finally get your kids started with their first savings account. Banks will let you open up a savings account for a teenager as long as they have a parent cosigner with them.
Opening a savings account and rolling it into a C.D. may not give you the huge returns you are looking for, but it is the perfect place to start your kids off on the right foot.
Another thing you can do is to open up a 529 plan. This way both you and your kids can start saving money for your kids college fund and any interest you make on the money is tax free provided it is used for school. College will be here before you know it, so you had better be ready.
Finally buying U.S. Savings Bonds for kids can help them get off on the right foot and learn the importance of letting their money grow, long term. Minors can hold U.S. Savings Bonds and they usually come with a higher interest rate then C.D.s which makes them a perfect place for kids to start investing their money and getting in the habit of doing it consistently.
Bottom line, when saving money for kids teach them how cool it is and how much of an impact it really can have on their future. Then lead by example.