Are you thinking about opening a savings account for your kid? Are you a bit scared about taking the first steps and actually going through the process? Fret not, you are probably just one of the many other parents who feel the same way. The good thing is that nowadays, people are provided with options that were not easily available in the past. For one, there is Goalsetter which offers kids and parents savings options they both can benefit from. But how would you know if you are on the right track? Consider these five steps before opening a savings account for your kids.
1. Know your options.
With the wealth of options in terms of savings account these days, make sure that you know what different choices you have. Don’t easily settle for a random suggestion from one acquaintance. Instead, do your research and ask around too. There are plenty of information readily available on the Internet now and while this can help you take a step forward, don’t forget to do your due diligence and ask from people who have already done this before. They might be able to give you some useful tips.
2. Consider convenience.
Every now and then, your kids might want to take the savings they put together to buy a new pair of shoes or what not. But not only this, there might also be times when there are emergencies that you would need an easy access to an ATM machine. Make sure that the bank you choose to open up a savings account for your kids are conveniently available.
3. Make sure you understand the fees clearly.
Banks always have corresponding fees for various accounts. In order for you to avoid regrets along the way, don’t be scared to ask about service fees and other charges that might be incurred as you go along the savings journey. This way, you may also have a better understanding of how best to manage your kids finances.
4. Make an educated choice.
Settling for the first option you come across with is never a good move. Keep in mind that the best way to go forward is to always have options. Compare the offers and the fees and how one is better than the other and so on. If you you have to write them down together, do so. Make a list of the pros and cons if you have to. This may seem like a bit of work, but it sure would help you in making the best choice.
5. Keep your kid informed about these decisions.
If you want to raise financially literate children, then don’t just manage their finances for them. Make them part of the journey and explain it to them just how it was explained to you. Okay, maybe a little less technical, but you get the idea. After all, it’s their money and soon enough, they will have to take care of it on their own. By making them an active part of the savings journey, they will acquire the knowledge they need little by little until they are responsible enough to make their own financial decisions.
Amila Gamage Wickramarachchi is the founder of this blog where she shares her parenting and lifestyle experiences. She is an engineer and a trainer who works in the construction industry. She is the founder of Sihela Consultants.(www.sihelaconsultants.com)