The year 2022 marks one of the strangest back-to-school cycles in history. Some students will be attending classes completely remotely, while others will be returning to socially distanced classrooms. The economy is turbulent, and many people don’t have job security.
Regardless of your school district’s situation, you probably want to make sure your child has a suitable environment for learning. If you’re responsible for hands-on learning, one of the best things you can do is teach your children about finances. Here are a few ways to help finally support your child’s education.
Many school curriculum options don’t focus on the practical aspects of finances. Math classes tend to talk about abstract formulas and shapes, but rarely do they teach a child how to balance a checkbook. Ideally, parents should try to teach their children as much about financial literacy as possible. This can start with helping them open their first banking account. When you open a bank account for your child, you help them learn about saving money, budgeting, and other finance skills.
It is possible to open a bank account for a minor. Parents can open a custodial savings account, or joint savings account with a child.
Another great thing you can do is involve your child in the process. Gather up a list of a few viable banking options. Then go over the plans with your child and have them choose the one they want. Explain the benefits and drawbacks of each. This includes the cost to open an account, the minimum amount for the account, and any limits on deposits.
You can also use this time to explain how savings accounts come with interest and explain the different interest rates. Remind your child that the savings account fees sometimes offset the interest gains. Having your child pick the account themselves teaches them to critically consider and compare essential aspects of financial institutions.
After opening the account, the next step is typically to develop a savings goal together. Then you and your child can plan how to meet the goal. Children need to learn to save money instead of spending it all at once, and you can use gaming methods to make saving enjoyable.
You can also use the account to show your child how to organize their finances. Have them keep track of deposits and withdrawals on paper.
This blog/website is only made available for educational purposes. It is designed to give visitors general information and a general understanding of select financial topics. It is not intended to provide specific financial or investment advice. Conduct your own due diligence or consult a licensed financial advisor/broker before making any and all financial/investment decisions.