Youth Banking 101: A Guide to Opening Accounts for Minors
Finances are one of the most sensitive topics that many people avoid. However, on the contrary, children should be taught all levels of financial literacy, investment, banking, savings, and rational money management from a young age. Since none of the school systems teach finance except perhaps private schools, it is up to parents to teach their children what they may not know.
Here, a children’s credit card has become of crucial importance for many parents, which has made life much easier for children and parents, especially when it comes to teaching money. Through this guide, we will explain everything you need to know when it comes to banking, savings, current accounts, and financial plans for children.
Numerous studies have shown that children whose parents teach them financial literacy from an early age grow up to become independent financial adults without debt and stress. One of the fastest and easiest ways to teach your children finances is by providing them with kids debit cards.
Explain to them what money is
You must explain to them what money is and how it is earned. The only correct way to earn money is through hard work. Money is not in abundance and money must be treated with respect. Although it may seem to many children that the magic machine (ATM) will always give money when we approach it, it is not quite so.
An important difference between needs and wants
Another important thing that children of all ages must master is the difference between needs and wants. By needs, we mean basic expenses such as rent, purchasing groceries, paying bills, mortgages, and gas, as well as numerous expenses that suddenly appear during the month. Therefore, when parents pay all the necessary bills, they have little money left for savings and wishes. Children’s wishes can be fulfilled when they deserve it through their efforts in the household and thus reward them.
Get them a credit card for the kids
One of the best and fastest options for teaching children financial literacy is through a children’s credit card. This option is designed to bring children closer to the world of adults and the world of finance and to teach them all aspects of the financial world.
The process of opening an account is quick and easy. Parents open an account in the name of their children by providing basic information and after filling in all the necessary information, the account is activated by depositing money into it.
Children have different types of finances from creating a separate savings plan, investment plan in various stocks, spending money, earning money, and donating money to charity. In addition to this, there is an additional option called activity tables of obligations and duties, which is easily adaptable to any age of the child.
Parents can put household duties, curricular and extracurricular responsibilities on the table. In this way, in addition to learning about money, the application teaches children how to fulfill their duties and obligations on time and will be rewarded or punished following their efforts.
When opening an account for children, the most important thing is to decide between two options: a savings account and a checking account.
Parents open a savings account for their children in their name, where they can save money that will be used for education, buying a car, a trip to Europe, or buying their first property. Children must have their own goals so that they continue to have the urge and will to save.
This type of account is intended for slightly older children who are ready to take on greater financial responsibility, such as managing a debit card or learning how to invest. It is important to note here that parents have full control and responsibility over transactions and activities that take place on the account.
Encourage them to invest
A single investment can double or triple the money, so it is very important to encourage children to invest in companies and brands that they support and love.
Children with the debit card option can invest in various shares of well-known brands and companies such as Netflix or Apple. What is personally interesting to many children is that they can monitor the state of stocks at any time, whether they are growing, falling, or stagnating. It is very important that children eventually expand their investment to other types of industries and thus enrich their portfolio and knowledge.
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