Something that parents rightly start early is getting piggy banks for children, but it can keep money-curiousity at bay only till the toddler stage. So what is a way out for growing kids to learn their money lessons right?
Technically a child can have bank account in her / his name. But it’s not that the kid would start operating the account on his own. An alternate way is to open a joint account with your child with either or survivor option and remove your name when he turns 18. In the course, he would learn his money lessons.
1. Start savings in the account
Make real credits into the account. Cash rewards for completing milestones or cash gifts should be deposited into account.
A monthly statement to show credits in account is a great motivation. With mobile apps, the job is even easier.
2. Budgeting & Rewarding
Other than deposits, the account should be used for budgeting calculated expenses like sponsoring wish lists. Purchases like the sports kit or the training shoes can be done when rewards are due. I remember reading that delaying gratification disciplines children.
3. Role Play
Sometimes without actual transactions, children can be allowed to play with their debit card while playing.
ATM pins sharing is a no-no, but they could certainly role play swiping of the card.
Siblings could compete for higher earnings and bank balance. They can even dabble with credits and loans among each other. The real exchange of money and change in bank balance will teach them a thing or two about money.
4. Prize money
Opening a dedicated account for the children is also a great way to prepare them for competitive exams & scholarships. They know that their prize money will not be taken away and will be secured in their personal accounts.
There’s a general phobia of using banking & financial products in our country. This is one area where possibly school curriculum could take note. It would definitely be worth the while to induct simple banking for our young ones.