Involving your little ones in the banking world is more than just opening their first account; it’s more about instilling valuable financial habits early on. Here is how and why you should start involving your kids with banking:
Early Financial Responsibility: Introducing your young ones to banking helps them understand the importance of managing money. When you open a savings or checking account, depending on their age, get them involved. Have them make the deposits with you or explain how withdrawing work. Demonstrate how to fill out a check or deposit slip. Also encourage your young ones to ask questions to the baking associates, they are more than glad to help.
Building Financial Skills: Managing a bank account requires tracking transactions, understanding interest, and setting savings goals. These skills are the foundation for their financial future. If they don’t understand how to stay organized with their transactions and budget, it will make it harder for them to live. Depending on the age, if they are old enough to have online banking, encourage them to set it up. Have them get familiar with how transfers and mobile deposits work. If they are not old enough to have online banking, give them a check or saving register. Have them write down every time they make a deposit or a withdrawal. It even helps them with their mathematic skills.
Fostering Good Habits: Early exposure to banking encourages habits such as regular saving and mindful spending, which can lead to better financial health in adulthood. After they learn how to track their account, they now can learn more about how spending money works, not just swiping debit cards. They should know how many days a deposit takes to clear in their account or the difference between current and available balance. They also really need to know how to not spend more than they have. Teach them about overdrafts and fees if they are not careful. Get them to check their account daily if they are spending money regularly.
Preparing for Future Financial Products: Familiarity with basic banking services prepares your young ones for more complex financial products and decisions later in life, such as loans, credit cards, and investments. If you help set up your child’s financial future, by the time they need to start looking at all these products, they will have a better understanding of what to look for. Whether they need loans or credit cards, it is good for them to know how they work. Next time you make a loan payment, involve your children. Explain what principal payment is versus minimum payment. Explain to them about interest rates and what they want to look for when it comes to rates. They might not need any products now, but the sooner you introduce them to these products or services, the better they will understand once that time comes. You know how easy it is to fall behind financially with mistreated loans and credit cards.
Exposing your children to the fundamentals of banking is a crucial step in preparing them for a financially secure future. As a credit union, we don’t just offer products and serve your accounts, we are here to also be your mentor. We want to help educate you so you can set examples to your kids. You and your kid’s success are what makes us successful too. There is never a stupid question when it comes to banking. If you or your family members have questions on any product or service, please don’t hesitate to call or reach out. Odds are you are not the only one. Kids today are the next generation, so let’s help set them up financially.
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