Financial Accounts Your Child Should Have Before College
Learning the importance of saving money and wise spending is an essential part of growing up, and it is up to parents to help their children learn these lessons with the right accounts and banking services. More credit unions and financial institutions are offering products tuned to the financial needs of kids and teens, so you should take advantage of these services to pave the way for a sound financial future for your children.
You can open a savings account for your child when he or she is very young, and this will be an excellent way to encourage family members to contribute to your child’s future. As your child gets older, he or she can make contributions too and learn how money grows when it is put away wisely.
Checking Account with Debit Card
Once your child gets his or her first job in high school, it may be time to open up a checking account with a linked debit card. Using a debit card will teach your child to monitor spending and manage money without handling cash. Just remember, the checking account will also be the first account that your child can actually withdraw money from, so you should still keep a close eye on it and remind your child of the habits of a responsible spender.
In order to build credit, it is necessary to open a credit card, but many teens and young adults are not fully aware of the responsibility that comes with credit card use. To get your child off to a good start, you might cosign on a low-limit credit card for everyday use as well as a higher-limit card only used for special purchases that you might help pay off. This way, your child will be less tempted to fall into the predatory trap that bigger credit card companies set up on college campuses.
For help getting your child off to the right start with his or her money, visit GCS Credit Union in O’Fallon. Call us at (618) 797-7993 or visit our website to learn about our special services for kids and teens.