From the time your child is born, parent’s look forward to celebrating birthdays.
Those milestones indicate your child is growing up. During those birthday’s parent’s tend to go overboard with presents, but one of the best gifts you can give your child is the gift of savings.
The best way to start a savings account for your child is to open a birthday fund. Start with your child’s first birthday. It’s easy and simple to open a savings account. Most savings accounts for children only require a little money. Take their birthday money and add $25 to the account and you’re on the way to giving your child a gift that will keep giving.
The best way to actually keep adding to your child’s birthday savings account is on milestone birthday’s. Of course, you can deposit any birthday monies received in between.
The next milestone birthday is age six. This is when your child starts to understand about money and will want to spend their birthday loot. The best solution to this minor problem is to let your child spend half and deposit the other half plus an addition $25. By this time your child’s birthday fund has drawn interest and your child is receiving a wonderful gift that keeps giving.
There will be three more milestone birthday’s after your child turns 6. You’ll want to add $25 for their 13th and 16th birthday. Of course by this time, your child will want to spend all of their birthday money, but you have to be strong. Again only let them spend half and show them their bank book. Their ever growing bank book is a great incentive for them to also start adding a little money here and there.
The final milestone birthday is the day your child turns twenty-one and you present them with their bank book. For the past twenty years you’ve been giving your child a gift that keeps giving back to them. You have given your child a head start in life. By this time, your twenty-one year old is working, in college, or perhaps married, but whatever the scenario, your child will have a hefty birthday bank account.
A word of caution, when you turn over the savings account to your grown child, don’t tell them how to spend their money. This is your gift to them. Let them spend the money however they choose. But if you have taught them well, they will be sensible and may continue to save their money. Whatever they choose, it’s okay. As a parent, you did good by starting a birthday savings account when they turned one. You gave your child not only a gift of money, but one of responsibility.