Financial education is an important part of life that is often overlooked. As parents, it is our responsibility to ensure that our children are well-educated in the art of managing money from a young age. In a world that is teeming with financial complexities, it is essential to instill in our children good saving habits that will ensure their future financial stability. Teaching our children about financial education will go a long way in providing them with the necessary skills and knowledge to thrive in life.

Children are continuously learning from their environments and the actions of those around them. Teaching them about money management is one of the best ways to instill good habits that will last them a lifetime. Here are several reasons why it is essential:

1. Improved Financial Outcomes: Financial education prepares children with the skills and knowledge necessary to understand important financial concepts such as budgeting, interest rates, and credit.
2. Empowerment: Educating children on financial matters instills a sense of empowerment and confidence in them. They can make informed financial decisions and will be better equipped to identify financial pitfalls and avoid them.
3. Improved Goal Setting: Financial education also helps children understand how and why to set financial goals, which can be a critical part of success in life.
4. Building Their Credit Score: Financial education helps children understand the importance of paying bills on time and how that can impact their credit score and ability to access loans.

One of the best ways of starting the journey of financial education for our children is by opening a savings account for them. Savings accounts provide an excellent opportunity for children to learn and apply their financial skills. Here are several reasons why a savings account can be helpful in teaching children about financial education:

1. Setting and Reaching Goals: Savings accounts provide an excellent place to put their money and work towards specific savings goals.
2. Understanding Compound Interest: Savings accounts often accrue interest, and this provides an excellent opportunity for children to learn about the concept of compound interest. With compound interest, earned interest is added to the principal amount, and interest is earned on both the principal and the interest earned in previous periods.
3. Learning About Budgeting: Setting up a savings account and setting a goal of saving a specific amount of money can be an excellent way to teach children budgeting. They learn to identify their income and expenses and find ways to direct their money towards their goals.
4. Encouraging Saving Habits: Opening a savings account for a child also encourages a culture of saving. Children learn to save regularly, and this can go a long way in developing a growth mindset that values saving and planning for the future.

When choosing a savings account for children, there are multiple options to consider. However, here are some tips on things that you should look out for:

1. Consider Interest Rates: Look out for savings accounts that offer a competitive interest rate. Interest rates can vary, so it’s essential to compare savings accounts before deciding on which one to open.
2. No or Low Fees: Avoid savings accounts with high fees attached. High fees can significantly lower the interest earned over time and make the account unattractive to use.
3. Accessibility: An excellent savings account for children should also be easily accessible by the child. If it’s not easy to access and navigate, it may not be used very often, and the objective of teaching saving habits will not be achieved.

Financial education is essential, and instilling good saving habits in children must start at a young age. Our children may not learn about financial literacy in school, so parents are encouraged to help them learn to save regularly, budget their funds, and plan for the future. Opening a savings account gives children an opportunity to learn about savings and compound interest, and sets an excellent foundation for learning more complex concepts, such as investing and entrepreneurship. If you’re interested in learning more about opening a savings account for your children, visit northpointe.com/banking/kids-savings.