Many young people receive no formal education on finances. Instead, they learn about money by observing their parents, caregivers, other adults, and peers. Pan American Bank & Trust offers savings accounts for minors as an incentive to promote financial wellness from a young age.
By establishing a minor savings account, you can begin to have fundamental money management conversations with your child in a fun and interactive way.
Why is financial education necessary for youth?
Before children are saddled with financial obligations in young adulthood, it’s important they learn about personal finance. Recent research from the University of Wisconsin-Madison concluded that fourth and fifth-graders exposed to financial education increased their financial capability later in life. A PBS study shows children’s money habits are already set by seven years old.
Opening a minor savings account can contribute to children making sound financial decisions later in life.
Opening a savings account for a minor
In order to start a minor savings account at the bank, a child will need a parent or a guardian to set up a custodial account. While the account is technically the child’s property, the parent or guardian manages the account on behalf of the minor.
The Benefits of Savings Account for Minors
Just like a piggy bank at home, a savings account is a tangible method to teach children about the importance of savings. While it may be tempting to control the account yourself, taking the extra step to involve your child in opening and managing the account will help establish foundational money values early.
Maximizing Financial Education with a Youth Savings Account
Opening a savings account with us is just one way to teach your children about money. Here are some other activities to keep financial education fun and engaging:
- Give incentives to save. For example, offer to match savings for a particular goal.
- Walk your children through your purchasing decisions when grocery shopping. Explain how couponing and budgeting work.
- Discuss big-ticket items like car shopping by explaining marketing tactics, negotiations, and the premise of loans.
The earlier children can learn and understand the importance of good financial health, the more wealth we hope they can acquire over their lifetime. Are you interested in setting up a savings account for your child? Come into any of our five branches and speak to one of our relationship bankers today!