There comes a day in every child’s life when the ceramic pig on the shelf is no longer enough. Perhaps their “Save” jar is overflowing, or they’ve started earning a bit of extra money from chores or a paper round. This is the moment many parents ask: “Is my child ready for a real bank account?”
Opening a first bank account is a rite of passage. It moves a child from the world of “physical cash” to the world of “digital numbers”—a transition that requires a solid foundation of financial literacy. Here is how to know if your child is ready and how to make the most of this milestone.
1. The “Physical to Digital” Gap
The biggest challenge for a child is understanding that money still “exists” even when they can’t see or touch it. Before opening an account, ensure they understand that the number on a screen represents the same “gold coins” they’ve been saving in their jars.
•Tip: Use a banking app together to show them how a purchase “subtracts” from their total.
2. Understanding “Interest” in the Real World
A bank account is the perfect place to see “Wait and Double” in action. Explain that the bank pays them a small reward (interest) for keeping their money there. Even if the amount is small, it reinforces the habit of letting money grow.
3. Responsible Card Use
Many children’s accounts now come with a debit card. Before they tap that card for the first time, they should understand:
•Security: Never sharing a PIN.
•Limits: Knowing that once the money is gone, the card stops working (unlike a credit card).
•Purpose: Is the card for “Spending” or is it for “Emergencies”?
4. Setting a “Savings Goal”
Don’t just open the account and leave it. Use it as a tool to reach a “Big Dream.” Whether it’s a new bike or saving for their first car, having a goal makes the bank account feel like a vehicle for their future, not just a place to hide money.
Building the Foundation
At The Financial Fairy Tales, we believe in “Learning Before Earning.” A bank account is a powerful tool, but it works best when the child already has the right values and habits in place.
Want to prepare your child for their first account? Our Financial Fairy Tales: Activity Book is packed with games that teach the core principles of banking, saving, and smart spending.
Keeping on top of your finances should be a top priority and
when you have tighter control over where your money is going and how much you
have left in the bank it should improve your chances of enjoying a better
financial future.
Photo by rawpixel.com from Pexels
Here are some suggestions on how to keep on top of your
money, including why it is so important to balance your checking account
regularly, how to make the most of modern banking facilities such as apps and
email alerts, plus some pointers on what to do when your money doesn’t stretch
far enough to cover your bills.
Balance the books
One of the best disciplines you can adopt when it comes to
successful financial management is to balance your checkbook on a regular
basis.
Keeping up to date with your expenditure is very important
to your financial wellbeing.
Be sure to record all your checks, deposits, and debit card
transactions in your checkbook register as they go through.
You could also set up a simple spreadsheet if you want to
keep a running balance as easily as possible and know how much money you have
at any one time.
Also, it is a good idea to make sure your records align with
your bank statements when they arrive in the post or are delivered to you
online.
Always try and
maintain a safety reserve
Unexpected bills can quickly wreak havoc with your personal
finances, which is why it is a sound strategy to try and keep a buffer of at
least a week’s worth of money aside in case you need it in an emergency.
To keep that spare money out of immediate temptation you
might want to transfer some money into a savings account with someone like Altana, allowing you the chance to
earn some interest on the cash but having access to funds if you need them.
Having some emergency cash in a savings account is always a
better idea than resorting to an expensive short-term loan.
Check your finances
on the move
Modern banking often means that your checking account can be
viewed via an app on your smartphone.
If your bank offers an app that gives you mobile access to
your account it is well worth downloading.
Having the app means that you can check your balance in
real-time while you are out and about, plus you can even pay bills and review
account activity immediately, rather than waiting until a later date to check
the state of your finances.
Try to avoid fees
Another persuasive reason for managing your checking account
with a high state of diligence is the opportunity to avoid unnecessary banking
fees and charges.
If your account balance falls below zero even for just one
day, there is a high possibility that your bank will charge you for being
overdrawn.
If you know how much is in your account at any one time and
what money is going out, it should ensure that you can take action in advance
to avoid going into the red and attracting some expensive overdraft fees and
penalties.
Agree on an overdraft
with your bank
If money is tight and there is a real possibility that you
might be overdrawn at some point in the month it would be much better to
negotiate overdraft protection than to go below zero without authority.
If your bank honors a check that takes you below zero or
bounces it because of insufficient funds, you are going to start incurring some
hefty penalties and that can only exacerbate the situation.
Overdraft protection is a line of credit agreed by your
bank. It will cost you money to use this facility but not as much as if you
become overdrawn without having an arrangement in place.
Make use of your
debit card
The problem with writing out checks is that it can take
sometimes take a few days for the money to be taken from your account.
This can make it hard to know exactly how you have available
to spend. The solution to this problem can be to try and pay as many bills and
transactions as possible using your debit card.
The advantage of using your debit card is that the money for
each purchase is automatically deducted from your checking account immediately,
making it much easier to keep control of your finances.
Use email alerts
Many banks offer a free email alert system to notify you
when your balance falls below a specified figure or when there are insufficient
funds in your account after certain payments have been presented.
Email alerts are a great way of receiving an early warning
about a potential problem and will give you
the opportunity to put things right before you incur any extra charges or a
payment is returned unpaid.
Sign up for email alerts and use the minimum balance warning
system to alert you when your funds are getting low.
Talk to your bank if
there is a problem
Many of us experience some sort of financial difficulty at
some point in our lives and even if you display a decent level of self-control
with your spending there is always the possibility that your money might run
out, albeit temporarily.
How you react to that scenario will define how well you
manage your finances in general.
It is far better to notify your bank of a potential problem
straight away than bury your head in the sand and hope everything sorts itself
out.
Always be proactive rather than reactive when it comes to
your finances and check every transaction carefully. Get into the habit of
checking your balance on a very regular basis and make a realistic financial
plan to put you back into the black if you do find yourself straying into the
red.
Successfully managing your checking account should be viewed
as a key life skill and the more often you do it the better you will get at
keeping on top of your money.
While many people are thinking about the end of the year, Christmas, and plans for new year, there will be a lot of students out there starting to think about their own plans for 2018. Many of which will be considering leaving school or college and taking the next steps in their educational journey, but with that comes a lot of worry and uncertainty.
One of the big things to consider would be the place you choose to continue your studies. Location can be a huge decision to make as this can really affect the rest of the decisions you make about your education moving forward, such as relocating, making new friends and living in a new place. Of course, it can be very exciting, but the big issue students face today is the subject of their personal finances. It is now more expensive than ever to continue studying, but yet, in many different career avenues it is still a vital step to take to gain the necessary qualifications and knowledge. Often people don’t have a choice but to continue their education. But, there are ways that you can enjoy your student life, study hard, while still surviving on student income, loans and the wages you can earn in your spare time. With a bit of clever budgeting, hacks, and considering other options you can live comfortably. I wanted to share with you some of the top tips to help you save money as a student. Hopefully encouraging you to continue your educational journey.
Tackle the big decision, where you are going to live
Often the choice of location is taken out of your hands when it comes to choosing the place you want to study. Many colleges and universities have specific courses, and you may find that relocating to other parts of the country will be your only option. So the big factor, and of course, a huge chunk of money each month is going to be allocated to a rent or payment for student accommodation. Often student quarters work out really good value, and enables you to stay with people of similar age, and also in the same position as you. It can be quite the sociable area to live. But others need to consider other options, especially as student accommodation can get snapped up quickly. This is when renting or even considering a flatshare could be the ideal choice. However, if you do get to pick the university, a great tip would be to choose somewhere to study that you can commute to from home. If you have the chance, stay at home as long as possible as this can work out to make the most financial sense.
Living away from home? Make sure you get student discount
If you do choose to live in rented accommodation, then you may have some utilities to pay. That means that you could be ending up with big bills if you don’t explain your situation at the beginning. There are utilities such as council tax, energy and water even where you can be entitled to a student discount. If you call up on opening the account and make the companies aware, you could potentially be slashing off hundreds a year in your annual spend on bills. It is definitely worth doing.
Not everyone is entitled to grants or scholarships, but there are some great options out there to consider. Searching online to find educational grants for perhaps the subject you are learning, or the area in which you are studying could really help subsidise your total spend on your education. Scholarships are also offered for different course and upon applying it is worth speaking to the offices at the colleges or universities to see if there are any programmes you are eligible to apply for.
Get the right bank account
As a student, you are entitled to a student bank account and these can be really worthwhile. All banks offer different incentives to bank with them, so a quick look online on websites like Money saving expert can help you to identify the best ones on the market that suit your requirements. Many banks offer a zero interest rate on overdrafts, as well as subsidised transport and cash incentives. Even cashback on certain spending.
You don’t always have to buy your study materials brand new
One big expense all students can face is the cost of study materials, more specifically textbooks and study guides. These can really add up over time, and eat into your dwindling bank balance. So instead a great tip would be to consider buying second hand or even renting textbooks online. These days you can get digital versions online, and these can also be a fraction of the cost of buying the physical book. Websites like eBay are great platforms to find study materials, and to even gain other things that you need for studying. Most of which are in great condition and even the new items can work out cheaper than buying in standard stores.
Spend your time wisely and become a mystery shopper
Did you know that you could be reimbursed for your time and purchases by becoming a mystery shopper? This may be nothing to new to you, but surprisingly, a lot of establishments like bars are wanting to specifically tackle the student market, and therefore there are mystery shopping assignments just for students. Companies like Serve Legal will regularly post jobs, and that means that you could be paid for actually doing something that a student enjoys doing anyway. How great would that be? This can be a great money saver as mystery shopping generally can cover restaurants, food establishments and supermarkets, helping to supplement the spending you might do each week on standard food and drink.
Make sure you budget
One of the key thing millennials struggle with today is having a good handle on their finances and their personal affairs. Especially with the introduction of contactless payments, it is far to easy to place your debit card in front of the screen and let all this little amounts add up and leave your account without really knowing what you spend each day. Having a budget can eliminate some of that unknown and help you keep in control of your spending. Furthermore, you can then ensure that you stay within your means rather than relying on other forms of credit such as an overdraft or a credit card. If you are unsure how to start budgeting, then there are some great guides and printables online to help you get started.
Use your student identification to help get discounted travel
Many people decide to commute to university and college to help keep the overall costs down of renting and accommodation, but that doesn’t mean you need to pay full price. Buying a pass for a month or even a year can significantly reduce the costs of bus or train tickets. Furthermore, using your ID could even get you a further discount off the overall cost.
And in many situations commuting via public transport is a lot safer too. Many young drivers are unaware of the actual Drink Driving Laws they need to abide by, with 79% of young drivers not even knowing what the legal limit is. Using your ID can both save you money and help you make safe choices on student nights out.
Declutter your life and build up some student savings
Heading off to your student accommodation or somewhere new will be an exciting prospect, but it also provides you with an excellent opportunity to declutter your life and reduce the amount of things you have. This can be an excellent time to sell unwanted things on eBay, use smartphone applications like Sphock or even sell locally on Facebook groups. There’s money in things like old mobile phones, books, DVD’s and even old clothes that no longer fit or necessary for your new student life. The money made can be put towards your student living.
It’s important that you start teaching children about money and managing their finances as soon as they are able to grasp the concept, if you want them to be financially secure in the future. But, it’s also not a bad idea do what you can to plan for their future, and help them to start things out on the right footing, too.
Here are some very simple things you can do now to help your children prosper in the future:
Set Up a Bank Account
Your children are never too young to have their own bank or building society account. In fact, opening one as soon as they’re born and putting a few pennies away every week will leave them with a nice little nest egg that they can put towards higher education, driving lessons or a deposit on a house when they’re older. It will also teach them to be more responsible with money, especially if you encourage them to deposit a portion of their pocket money and cash gifts in there.
Save for Higher Education
No matter how well educated your kids are about money; they probably aren’t going to have thousands in the bank to fully support themselves through university aged 18, which is why you might want to consider starting a university fund to help them out on the path to higher education when the time comes.
Invest in Great Healthcare
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Investing in excellent health care for your whole family is a fantastic investment in all your futures. It will ensure that any illnesses you have can be dealt with quickly so that you can continue to provide for them and show them how to be responsible with money while they are still kids, which is why you should start collecting quotes from the best Irish health insurance brokers right now. No matter how well-laid your plans are, an illness could leave you all struggling out of the blue.
Invest in Regular Health Check-Ups
Regular health check-ups are an essential part of taking care of your children’s health and well-being. By making sure that your kids get regular check-ups, you can not only stay on top of any potential issues or concerns, but you can also help them establish good habits and routines around staying healthy. Investing in your child’s future means investing in their health. For example, if your child has problems with their hearing or vision, then this could impact negatively on their development and learning. The best vision insurance will ensure that they receive the finest possible care so that any problems can be detected and treated early, and the same goes for hearing tests. Therefore, you need to ensure that you have insurance that covers these essential health needs.
Invest in Life Insurance
As a parent, it’s sensible to take out a life insurance policy, so that, should the worst happen to you or your partner, your kids are well provided for and will not have to worry about money.
Open a Junior Self-Invested Personal Pension
You might think it’s ludicrous to even be thinking about your child’s pension when they’re still a young kid, but the world of pensions is changing rapidly, and there is much less certainty in the industry. Not only that, but the longer they save for, the better off they’ll be in the future. So, why not consider investing in a Junior personal pension, which offers 20 percent tax relief on any deposits. It’s a great way to get the pension conversation started with your kids, too.
Setting up a trust is another good way to invest in your children’s future. It will ensure that certain assets will be managed on behalf of your children until they are old enough to deal with the responsibility themselves.
If you have cash to spare, what better way could there be to invest it than in your children’s futures? As you can see, there are so many good ways to put that money to use that it’s worth at least considering.http://credit-n.ru/trips.html
