We have been wanting to open up a savings account for my son, but the bank requires a $50 minimum. My wife recently took him to the bank to cash in his change and he has $28 so far. We are getting closer, but I am going to make sure he saves every penny before he has the privilege of having his own savings account. No free rides! Even for a 4 year old. Now you might be thinking why so hard on the kiddo? Having a savings account really helps lay the financial foundation that will be the catapult toward financial freedom one day.
Having a savings account introduces them to the intrinsic value of saving. Like anything, if you want your kids to develop healthy habits you must start early. My greatest wish is to give my son the tools needed to succeed in this world. I feel if I start early, I can really lay a solid foundation. I understand he will make decisions that I disagree with, but it is my job to prepare him for life. Besides, I do not plan on having him live with me until he is 30 and I have to get a court order for him to be removed like Michael Rotondo.
It gives them spending options. If you are broke you have little options. I want my kids to have plenty of options and money does provide that. Remember the saying “money does not buy you happiness.” Well, I have a different saying… “That is what poor people say to get them through the day.” If you want a car, nice house, video games, etc., you have to have the resources to purchase it. I hope my kids do not overindulge, but they will need money to survive.
It is the gateway to other financial endeavors. By having a savings account I hope that I can teach them to value their hard earned money and use that experience to educate them about other financial instruments; index funds, ETF funds and individual stocks. The idea is to one day allow for their money to work for them. A basic savings account does not pay enough interest to keep up with inflation. However, it is a start. Lets just call it the gateway drug to becoming greedy. Get your kids hooked now!
Maybe I am over thinking a lot of this or maybe I should just allow my kids to be kids. However, as a parent I feel I have a responsibility to guide them and give them the tools they need to succeed in this world. What are your thoughts? How will you educate your kids?