Preparing your children for the future means there is a lot of ground you have to cover as a parent in terms of guiding them to be happy, successful, and content. An essential factor that should be instilled early on is good financial habits, but it also means providing the right resources for them while they are still too young to provide for themselves. Giving these things to your kids can help them out not just in their youth, but when they eventually leave the nest and have to make it on their own.
A checking account and savings
Having both of these for your child can be helpful because one can be for spending while the other is not meant to be touched as it will stand as their savings for the long run. A checking account can help you have a secure space to put money in when your kids need their everyday transactions, eventually allowing them to use an ATM so you can give them what they need even if you may be at work. Then, the savings account should be created with limitations so that it has time to grow in interest and stand as a fund for their future. Lots of banks actually offer accounts catered explicitly for kids, so this can help them feel a sense of ownership, and you can already start instilling in them how to manage money.
Financial advisors don’t always recommend getting your child their own insurance when they’re too young. The best way to go about this is to simply mark them down as dependents for your insurance plan, and even add some coverage for them specifically if the insurance firm that you pick offers such a deal at an added cost to your existent policy.
It would depend on your financial strategy as getting your child their insurance policy will be more expensive, though they can, later on, use it in adulthood to get more coverage or as a savings pool.
A piggy bank
This factor may be one of the oldest and simplest variations in the book but can be an impactful factor when teaching your child about money in their crucial developmental stages. It allows them to have more of a semblance of control over saving since you would likely need to have more active management of any bank accounts. It doesn’t carry many risks and allows them to set aside money on their terms whenever they feel like it, no matter how small the amount. Plus, when they save enough, they get to have the treat of busting it open and getting the feeling of buying something they like with their own efforts.
On top of that, many different iterations of the piggy bank nowadays are more engaging to kids. Some examples are the money-eating boxes that you feed, the ones that look like a box where you place a coin that a small kitten will pull in, and a lot more fun varieties that can encourage putting money in.
Financial gifts are more than just literally giving your child cash, and this can be an opportunity to reward them while also equipping them well for their financial future.