STARTING A BANK ACCOUNT FOR YOUR CHILD

Mar 21

Are you interested in starting a bank account for your child or another child in your custody? For Christmas 2019 I decided to start a savings account for my child who just turned six months old. My goal in starting this bank account for her was both to save any money given to her and to teach her about money.

Teaching my daughter about money while she is young

I realize that my daughter who is still an infant cannot understand anything about money. However I also believe the earlier that you introduce financial concepts into their lives the better they will understand them. I plan to teach her in many small ways as she grows about managing money. I want her to begin to value saving money and living a debt free life young. I feel this is extremely important for her to understand before she is someday faced with all of these hard lessons on her own.

Why did I decide to start a savings account for my daughter at such a young age?

I believe that setting your children up right financially requires preparation and time. I feel that it is important to start her savings account early so that she can watch it grow and learn about saving. I want her to know about her own money from a young age and to learn all the important lessons that come with money. I feel teaching children every step of the way how to manage money is the only way to ensure that they will understand its value early on in life. Some of the lessons that I want her to learn include how money is earned, small amounts of money that are saved add up over time, the value of Investing and giving to others and learning to live on a budget. This will take many years to teach these things and I am sure someday I will still look back and wish I could have taught her more.

How I began my first bank account

My father created a savings account for me at a young age and I still remember receiving those statements in the mail frequently. I would always look at the statement and then pester my dad about spending my money. What was missing here? The teaching moments where we could have discussed so many aspects of managing money. My parents meant well but like many they did not always understand how to teach me the lessons that I needed to learn about money. In attempting to teach my daughter about money I am sure I will also fall short in many ways. I know that the lessons that I have learned can make great talking points on life and managing money with my daughter. I believe that the lessons that I learned the hard way, can help her just as much as they can help those I share about them with on Saving Joyfully.

So what do you need to start a bank account for a child under 18?

The child's social security card
Your personal information will need to be provided along with proof of identification
The basic funds required to open the account - At the credit union that I use this was $25 to start the account. These funds must be kept in the account unless it is closed which at that point can be returned to you.

This was all that was required at my credit union to begin her first savings account.

How does setting up a savings account for a child work?

I suggest selecting the bank or credit union that you use yourself. This makes it much easier to manage your money and hers from your own online banking and branch location. This should be a fairly simple process at your own bank or credit union that does not require an appointment. If you are in fact under any time constraint I would suggest calling ahead and setting up an appointment. Whether appointments can be made in advance or should be made will be specific to each financial institution.

Who has access to these funds?

Any adults that are listed on the account will be able to access the child's account. This can be done by going in to the physical location or online using online banking. Some savings accounts even provide an ATM card for a minor child's savings account. I was offered one of these which I chose to decline at that time.

How does saving for your child affect your own taxes?

I cannot answer this question as well as I believe can be answered in this post by Finance Zacks.

They also address some other forms of accounts that you might be interested in creating for your own child. I have chosen a basic savings account for my own daughter at this time.

My Goal with her first savings account

I plan to start saving any funds given to her and as she grows teach her to save a percentage of everything that she receives. I have discovered this bank on Amazon that I love, to help teach her more about managing money.

She will learn to not only Save money but to give to others also with the simple concept of this bank. If you attend a church and believe in tithing, this is also a great way to teach your child to give 10% as a tithe.

I hope you found this post helpful in creating your child's first Savings account. I would love to hear your story in the comments and why creating a savings account is important to you. Why have you chosen to start a Savings account for your own child and what have you found helpful in teaching them about money?