As a parent, you want to prepare your children for adulthood by teaching them life skills, positive habits, and good values. The best way to do this is through real-life, hands-on experiences. If you’d like your kids to develop healthy eating habits, ask them to help plan dinner. If you’d like them to value neatness, encourage them to clean their rooms. 

In the same way, if you want your children to learn saving and budgeting skills, set them up with their own savings account. And if you want them to go on to higher education, start a college savings account and involve them in the process.

A youth savings account is a smart start.

Kids with their own savings account learn lessons that will last for a lifetime, as they:

Develop real-life money skills. When children have to figure out how to budget their hard-earned lawn-mowing money, it’s a practical lesson they will never forget. And if they also get a youth checking account in their teenage years, they will further develop their budgeting skills as they learn to separate their spending money from their savings.

Establish good money habits. When children decide to save a certain percentage of any money they receive—and stick to the plan no matter what fun distractions may arise—they are developing a habit that will pay tremendous benefits in the future. 

Practice good values. Whether their five-year-old has $10 in birthday money, or their 16-year-old has $1,000 from a summer job, parents can have age-appropriate conversations about self-discipline, wise choices, and the value of saving.
 
When children learn to save, the whole community benefits.

All kids, regardless of their family income, can learn skills that will enable them to build a resilient financial future. When children who save money grow into adults who save money, the whole community benefits. 

A college savings account encourages kids to enroll and graduate.

In addition to offering good counsel, parents need to model their own money skills, habits, and values. Starting a college savings account is an excellent way to demonstrate the importance of higher education—and it lessens the need for student loans.

Research shows that even a small college savings account increases the likelihood that a child will attend college and graduate. “Even with savings of less than $500, a child is 25% more likely to enroll in college and 64% more likely to graduate than a child with no savings,” writes Kristine Shaffer, an enrollment research specialist.* 

Starting a college savings account early in the child’s life demonstrates to the entire family that going to college is not only possible, it’s expected. “This motivates parents to prepare their children academically and socially for college from a young age,” says Shaffer. 

Families can save for college with a 529 plan.

Consider a 529 plan (qualified tuition plan), which offers flexibility and tax advantages. There are two primary types: 

• Prepaid Tuition Plans – Pay in advance and get today’s prices for tomorrow’s college credits at eligible colleges and universities. 
• Education Savings Plans – Invest in an account that will grow, and then use the money for educational costs, such as tuition, books, and much more.

Begin your child’s financial education with a Youth Savings account from Excite. 

Excite Credit Union invites children ages 0-17 to become Members and get a Youth Savings account! Check out all benefits, including access to the learning platform Banzai!, which teaches users how to be budget wizards. Visit Youth Savings at Excite Credit Union.

Make Excite Credit Union your partner as you prepare your family for success!
 

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* Shaffer, Kristine. “College Savings Plans Increase College-Going Rates,” Saving for College, Dec. 4, 2018: https://www.savingforcollege.com/article/college-savings-plans-increase-college-going-rates.