Financial literacy is best taught from an early age. Kids who learn how to manage money responsibly earlier in life are more likely to enjoy financial stability in adulthood. One effective way to introduce your child to the world of personal finance is by opening a credit union savings and checking account in his or her name. Until a child reaches the age of majority, a parent or guardian must remain on the account.
Deciding to Open an Account
One common assumption by parents is that they should wait to open an account for their child until the child demonstrates financial responsibility. But children learn best by doing. Achieving financial literacy can take some trial and error, and kids learn from their mistakes along the way. It’s far safer for your child to learn from financial mistakes early in life than later on when he or she has moved out. Every child develops differently, but in general, most kids are ready to open a credit union account when they turn 14 years old.
Exploring the Account Features
Make the experience a collaborative one right from the start. Ask your child to read the account information with you, and discuss what it means. If your child has questions, it would be a good learning experience if he or she called a member representative or visited a branch to ask. Until your child turns 18, you’ll be listed on the account too. This means you’ll have complete access to view the balance and statements to make sure your child is behaving responsibly.
Making a Financial Plan
Now that your child has an account, it’s time to make a plan. First, sit down with your child and do some quick math to demonstrate how interest rates allow money to grow over time. Recommend to your child that he or she set aside a specific percentage of his or her allowance and extra earnings every week for savings. Together, calculate how much that would add up to by the time your child turns 18. To stay motivated, your child may need occasional reminders of the benefits of long-term saving.
GCS Credit Union invites young consumers to practice financial responsibility by opening a Student Success Account Package. This includes a savings and checking account in O’Fallon, and it’s available for individuals ages 14 through 23. Call a friendly member representative at (618) 797-7993.