Teaching Kids About Money - The Multiple Learning Opportunities of an Online Savings Account

by Jim Smith

Teaching kids about money at home is one of the most important lessons parents can give children. The ability to learn how to make money work for you rather than you for it is a critical leap of knowledge most kids simply don't make. A savings account for a child at a young age can be an important starting point for a lifetime of learning about what money really is and how it works.

If You're Going to Go Through the Hassle of a Savings Account... Go All the Way

I believe the best savings account for kids is an online account linked back to a local savings account. I think it is important very early on to educate children about the differences between rates of return and the usefulness of both types of banks (local and online). Both types of saving and loan banks serve a purpose for families and understanding how the two are the same and different will start your child down a good life long learning path.

There is no doubt that most people find finance and banking utterly boring. It simply is what it is. On the other hand there are a few fundamental concepts to teach children at an early age that will help them intuitively understand more important financial aspects in later years.

First among them is to differentiate between banking offers. Figuring out the best savings account for kids at your children's ages is a great opportunity to explore the different offerings in the saving marketplace and including the kids in the discussion.

Topics to discuss might include:

What is an interest rate?
In what country is this bank's headquarters?
Why does the bank pay me to hold my money?
What does FDIC mean?
How can I track my money with the computer?
Which bank has the highest rate?

Online Savings Accounts Force Parents and Children to Learn Fundamental Financial Skills

All of these factors should be a part of parents' discussion with children about which is the best savings account for kids. It is also perfectly alright to have the conversation more than once, as needs change and the child grows.

Parents who take the time to learn basic business and banking information for themselves become well prepared to teach and demonstrate finance to their children. Given that public education is virtually devoid of teaching of basic home finances any pointers parents give their children are vitally important, because they won't get that information elsewhere.

While ultimately the lessons of basic money management are dull they are important. Here are some tips to help make the discussion about a savings account for kids more fun and meaningful to them.

If you're not sure about banking online, here's a few thoughts on how to open a bank account online wisely.

Article submitted Monday, September 28, 2009 & read 126 times.

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» left by Nenita Wells (2 years 135 days ago.)

Hi Jim.

Great article. I think you hit the nail right on the head! Children has to learn about savings from the moment they receive an allowance.

Thanks for sharing and welcome to Searchwarp.

Best to you.

Nenita
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» left by Harv Kay (1 year 362 days ago.)

Jim's article is great to bring awareness to us parents that budgeting and saving is important for kids - the habit should start when they are young. To appreciate money and how it is earned and how it can become their boss or they become the boss. I also suggest that cooking and the process can help kids with budgeting and money management - for example to prepare a meal - make a plan - budget for it. Thank you again Jim.
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