Parenting is expensive. From formula and diapers to sports and cars, there is always something in the budget. With so much going on right now, it is hard to even think about the future. However, saving for your child’s future is one of the most beneficial things you can do for them and it’s important to start early.
What is a Kid’s Savings Account?
A kid’s savings account is an account you open under your child’s name that you can put money into. These accounts generally have a higher interest rate, and the ability to restrict access to make sure you have control of the account, usually don’t have service charges, and have a low opening deposit requirement, making it a great way to save money. Also remember, where you have 40 years to save for retirement, you only have around 18 years to save for your child.
Why should I save for my child’s future?
College is EXPENSIVE! If your child chooses to go to a 4-year state university, they can expect to pay anywhere from $10,000.00 to $22,000.00 a year. Multiply that by 4 years and that’s $40,000–$88,000 for 4 years! Add books, meals, and transportation to that and it makes for a very costly four years. Saving money now will lessen the amount of debt you and your child may take on when they go to college.
Not going to college? That’s okay, too! More than ever, people are choosing not to go to college and to go straight into the workforce. Your child could still benefit from a savings account! They could use the account for a car, a deposit on an apartment, a down payment on a house, or just a savings account for an emergency fund. Moving out of the house comes with all kinds of expenses that a savings account could help with. It will also keep them from going into debt from other payment options.
What are the benefits?
A Step in the Right Direction You can’t prepare them for everything, but you can make sure they have the best possible start to adulthood. Having a savings account can provide you and your child peace of mind in an already stressful time of graduation, moving out, jobs, and anything else that may arise. Having an account in place will help with any unexpected expenses.
Holiday Gifts We are approaching that time of year when parents are being asked what their children want for gifts and many parents are overwhelmed with toys their kids don’t even play with. Instead, a great gift to ask for from family would be a contribution to their savings account. This helps keep the number of toys they bring home down and helps parents so they aren’t the only ones contributing to the account.
Teaching to Save Teaching your child to save money is a goal most parents have and having a savings account for them helps them to see their money grow and creates the excitement of saving. Is their piggy bank full? Bring it to the bank and deposit it into their savings account. Now they’re contributing to the account too! It is easy to make saving money a fun activity to do with your kids.
Whatever path they choose, your child can always benefit from a savings account. It will help create the best start possible and provide many teaching moments over the years. It will not only be beneficial to your child but also provide you peace of mind that they are taken care of. As always, a friendly GSB Personal Banker is always available if you have questions or want to get started.