By Aaron Allen
The Portland Medium
Sponsored Content From JPMorgan Chase
Financial education is essential to long-term success, and it is being advised that we begin the process of introducing our children to financial literacy at an early age. Research suggests that many of the habits we carry into adulthood are set by age seven. For parents, it’s important to build a solid financial foundation early that children can build on.
Establishing or gifting a child a bank account this year is one step to promoting financial literacy, develop healthy savings goals, budgeting habits, and empower your kids to make sound financial decisions that can help them have future financial success.
Beth Dotson, Treasury Sales Group Manager and member of the Oregon Market Leadership Team for Chase, agrees and says that the earlier parents begin establishing a financial mindset in their children will increase their chances of having good financial habits when they become adults.
According to Dotson, even something as simple as a piggy bank can help develop healthy savings goals, budgeting habits, and help kids to learn about the value of money.
“Even before seven, I remember piggy banks,” says Dotson.
“Lost change found around the house or the car are things that you can use to teach your child about physical money and saving, using for an example, a piggy bank,” added Dotson. “By the time they are seven parents can begin teaching about banking and savings and Chase provides guidance and tools that can aid parents in this endeavor.”
Unlike a regular savings account, a child’s savings account may come with additional perks, including no monthly account fees or opening balance requirements. Additionally, banks often create original content for younger audiences, making it easier for kids to learn the basics of responsible money management. Often these learning tools are online/mobile – for example, Chase provides new young customers with The Quest, an animated graphic novel that teaches kids about saving regularly, spending wisely and earning money – to help boost your child’s financial education.
“What is important is educating children about finances,” says Dotson. “Chase’s The Quest is a tool that does just that. It is created in a way that is user friendly to the child and parent. Its comic book presentation is appeasing and eye catching for children, drawing them in as the information provided teaches children how to be disciplined in saving and avoiding the pitfalls of spending.”
Chase provides the following advice for parents when it comes to opening a savings account for their child or children:
• Help them learn more about saving money. Teach your kids how to plan and prioritize their costs. Help them develop a realistic budget to build a foundation and monitor their spending.
• Save money for a specific short-term financial goal. Take the opportunity to encourage your child to set aside funds in their savings account to make a special purchase – whether it’s saving up to buy that new game or bicycle they’ve been wanting.
• Provide hands-on experience. Kids often learn by doing, so consider opening a child savings account as soon as they start receiving money. Empowering them with a child debit card can help build good money habits.
• Teach them more about banking. Your child can learn how to deposit checks in a branch, bank online, and withdraw cash at an ATM by helping co-manage their account.
“Starting young will give your child the necessary practice in establishing good and sound financial literacy that will prepare them for their future,” says Dotson. “Helping them learn about savings, letting them handle money, teaching them short term savings goals, and exposing them to transactions like going to the store are very important.”
“Chase provides children with debit cards, accounts, online banking, all of this to help children learn and understand the value of money and more importantly the discipline in saving money,” added Dotson.
Opening a kids’ savings account provides an avenue for parents to talk to children about their financial wellness and while they often don’t pay high yields, these accounts are meaningful tools to start a child on a responsible financial path from an early age.
In addition, it is vital to provide ways for children to earn money for things like chores, an allowance or a summer job. The goal is for children to gain real-life experience earning and managing money before they become adults. That way, they will be more equipped to be part of a larger discussion about debit cards, credit cards, auto loans or other financial products they may need when they get older.
“Tools like The Quest tap into introducing children to work ethic,” says Dotson. “Introducing children to ways of earning money. Whether that looks like an allowance, or even starting their own business, Chase encourages parents to introduce ways children can raise their own income and apply that to the savings accounts.”
“Financial literacy leads to wealth building,” continued Dotson. “I encourage parents to introduce their children to money management and banking at the earliest age possible. Instill in them to begin thinking about their financial futures, make it fun with tools like The Quest and a piggy bank. Reward them when savings goals are met by taking them shopping to learn the value and transactional nature of money.
“But the most important aspect of all this is teaching our children the value of saving and how that applies to financial literacy,” concluded Dotson.
