It’s a rite of passage few of us forget: getting that first bank account. Most of us got ice cream, and (not pointing fingers) many of us got savings account passbooks. Now we have apps.
Is Your Child Ready for the First Bank Account?
All jokes aside, a handy barometer for whether or not your child is ready for a bank account is if they understand the concept of interest. Others view the milestone of getting an allowance as the appropriate trigger for getting a bank account. Whatever your family has decided, it’s the start of a relationship that will be life-long, and hopefully beautiful. That’s why it’s important to create the best conditions for — let’s face it — the best first impression your kid has with money.
Preparation for a First Bank Account
Start by getting them something for organizing their bank papers, and try to get the tools they want. It’s good to resist the temptation to interfere with inconsequential details, and as we all know, office supplies are fun.
When it comes to the big day, I encourage calling the bank and setting an appointment to open the account — if only because I believe you get the A-Team when you make appointments.
With all the preparation you’ll have done by then, you’ll probably know exactly which account you want to open, but let the banker sell it to your kid. And of course, reward your rascal for sitting through their first business meeting.
Once the account is open, all you have to do is wait for the lessons to start. Little by little your child will see the link between goals and saving. If they have more than one goal, they can:
- “Split the pot” as soon as the money comes in; or
- Make a scheduled transfer between accounts regardless of when there is income.
We at Judith Heft & Associates favor stability and monthly spending plans so we would choose option 2. That’s the kind of thing we’ve been teaching young people for years — not just spreadsheets, but a whole philosophy. If you would like us to teach your child more about money, contact us to see how we can help!