I spent years and years working for financial institutions, working on products, marketing, event management. My opinion, at that time, that bank accounts for our kids, especially kids savings accounts were the bomb diggity.
My kids are 9, 6 and 4 and are starting to understand how money works. Their spending personas are really starting to appear. Our 9-year-old works, does extra work for bonuses and saves. Our 6 and 4-year old do just what they need to get their pocket money and then want to go straight to Kmart to spend it. Don't get me wrong, they are great negotiators. They even negotiate to get payments in advance to buy that "special toy".
I need to stop this behaviour, I need to show them the importance of saving up for that special item. I can't imagine going to my bosses and asking for my pay in advance for hair cut. So we have jars. This way they can physically see their money. If their toy is x amount they then sit and work out how long it will take to save up for it. Most of the time the boys pick a cheaper toy just so they can spend their money!
This is where my article starts to take a different turn to last weeks article. My husband and I also contribute money into a kids savings account each pay cycle for them. The typical, saving for weddings, schooling first car etc. After working at DC Advisory Group for nearly two years now I have discovered, THERE ARE OTHER OPTIONS AVAILABLE.
My thoughts are, we need to teach our children about how bank accounts work. So, the kids savings accounts that banks offer are good to start teaching them about minimum deposits, interest and saving, not just earning and spending.
As a parent though, we need to know there are other options available for the investment you are making for your child. In my opinion, there are too many rules, interest rates are flexible, and some accounts flip you out into a non-interest-bearing account after 12 months, in kids savings accounts. Therefore, you only earn interest within that twelve-month period. Not advantageous for long term savings.
To find out your best investment option for your child/grandchild contact us to make an appointment
The information provided in this BLOG is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.