Use saving tips for teens and tweens to help your child get a head start on savings
From the minute your son or daughter begins to accumulate money, whether it is gifted for life milestones or earned at a job, it is important to teach them the importance of saving. Teen savings accounts offer your child a way to begin investing their money and earning interest. Plus, they give you an important opportunity to teach your child a skill they will be able to use for the rest of their lives.
Looking for ways to earn money
Before you can teach your child about saving money with savings accounts for teens, you have to help them understand how they can earn it. Teens and tweens have many options for making money, which evolve as they get older. Help your teen understand managing an income with these earning options:
- Allowance: If you have not already implemented an allowance structure for your tween or teen, now is a good time to do so. Make a list of weekly expectations and pay an allowance only if the tasks are complete. To provide even more value to the allowance structure, consider assigning a dollar amount to jobs around the house that are above and beyond basic weekly expectations. This gives your child incentive to work harder and earn more money.
- Grades: Consider rewarding your child for good grades in school. Assign a dollar amount for grades earned at the time of progress reports and report cards. Good grades can be hard work, and deserve to be rewarded. Why not take this opportunity to contribute to a savings plan?
- Age appropriate jobs: Once you decide that your child is ready to begin earning money outside of the home, help them to find an age appropriate job. Tweens can begin taking on jobs for friends and neighbors, including babysitting, pet sitting and even doing yard work. Teens have more options and can consider part time and full time jobs in food services, retail and more. Work with your child to make a decision you both can feel comfortable with.
- Money given for milestones: It is important to talk to your child about valuing money given for graduations, religious milestones and birthdays. Every dollar counts as income and depositing this money into a savings account for your teen will help them learn the value of saving.
Implement these saving tips for teens and tweens
Once you and your child have talked about earning income, you should set up some up some guidelines for saving. Consider opening a joint savings account or look into savings account options for teens. The more structure you can place around your savings plan, the more successful it will be. To get started, consider implementing these saving tips for teens.
- Determine a percentage of earnings to put aside: When your child is not yet of driving age and has minimal financial obligations, they will be able to put away a larger percentage of their earnings. Start by adding up their average weekly earnings and deciding how much spending money you feel is appropriate per week. If your child is earning an average of $15 per week, maybe it is reasonable that they learn to save $10 and have $5 for spending. Then as their financial obligations increase, work together to adjust their savings ratio so that they have a healthy combination of spending money and savings funds. The goal is to teach them to strike a healthy balance so they can continue managing their money into adulthood.
- Never outgrow the piggy bank: Teaching your child the value of a dollar is one thing, teaching them that every penny counts is another. Recommend that your teenager puts change from every purchase directly into a piggy bank. Let that money grow until it is time to talk about teen savings accounts.
- Use a spreadsheet to track savings: Money management is not just about knowing how to put money aside; it's also about knowing how to keep track of it. Buy a notebook or use a digital spreadsheet program designed for tracking money and help your child learn how to be accountable for their money.
- Set savings goals: Although it might be nice to buy your son or daughter the things on their wish list, there is also something rewarding about helping them set financial goals to make the purchases themselves. Once they set goals and know how to plan and save for larger purchases, consider contributing to those goals with gift money, or offering extra jobs around the house.
Look into teen savings accounts to formalize early saving efforts
Although you might be able to start off your child's savings at home, there comes a point where money may be safest in the bank. Plus, money invested in a savings account can earn interest. There are a variety of options when it comes to opening teen bank accounts. If your child is old enough, you might want to consider opening a teen savings account. Until then, you can open a joint account or an account in your name that is designated for their money. The most important thing is that you keep your children involved in their progress since savings accounts for teens become less effective when the child is not involved in the management of their money.
Open a savings account for your child with Citizens Bank
Help your child learn money management skills at an early age. Open a savings account at Citizens Bank today to give your teen or tween a place to watch their money grow. To learn more about teen bank accounts or to explore our savings account options, speak to a qualified representative at 1-877-360-2472.