It is great for a child to have a special place to keep all the money he saves - like a glass jar or a bank. But when your child has saved up a bit of money it is a great time to teach them about how to save and manage his money. Help him open his own savings account.
Take your child with you when you go to open his first savings account. The child should be a part of the entire process and be right there with you as the banker explains the account.
A statement account is a good beginning because it gives you the ability to monitor the account along with your child. Your child will receive a monthly statement showing all deposit and withdrawal transactions and any fees charged or interest earned. You will receive the same statement.
When you get a copy of the statement, it is important that you review it with your child to be sure that he understands each and every line item so that he can keep track of what is happening with his money.
Fill in any missing details that you feel will help your child learn to budget. Pencil in the reason for each withdrawal to help your child see clearly where his money is going each month.
There are other types of savings as well with features that are good for keeping track of spending and learning to budge. For example with a passbook account your child will be given a transaction booklet that he will need when making deposits and withdrawals. With every transaction made the book is passed through a machine and the transaction is printed right into the book for easy balance calculation.
The passbook savings account is good for kids who need to keep up daily with their balance instead of waiting until the monthly statement is sent.
If you are a member of a credit union your child will be able to start account with your credit union and become a member himself. You can go to the bank or credit union together to pick out an account that best suits his needs. There will most likely be some nice incentives for opening a new account.
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