Young Savers: Saving Options for Children

It’s never too early to start guiding your children in forming good financial habits – although chances are, a child isn’t going to have much interest in saving for the future. However, it really is important to begin teaching children about the importance of saving from an early age.

In this blog, we’ll be sharing some fun tips and tricks that you can use to encourage children to understand why saving money matters, to help you lay the foundations for a healthy financial future. Then, we’ll cover the savings options for children that we offer at Newcastle Building Society – because there’s no time like the present to get into the habit of saving.

How can I encourage my child to save?

More than eight in ten parents* believe it is their responsibility to teach their children about money, yet one in six say they don’t feel confident about it*. So, why are we lacking confidence when it comes to educating children about the value of money?

Saving money doesn’t involve a great deal of fun for an adult, let alone for a child! But the trick to engaging children when it comes to their finances is to make it both fun, and visual. The average age a parent will start to discuss money with their children is nine years old, however statistics show that children begin to develop money habits from as young as seven.

*http://www.independent.co.uk/money/spend-save/how-to-teach-money-children-kids-personal-finance-tips-guidelines-property-a7789381.html

There are a number of ways to introduce your child to saving (and earning) money from a young age, and even make it into a game. For example:

  • Take your child shopping with you

Have your child join you as you do your grocery shopping, and give them a few pounds to spend so they can make decisions on what to buy. Encourage them to compare prices of the things they want by challenging them to come back with as much change as possible.

  • Set up a rewards system

Setting up a rewards system is a really easy way to encourage your child to save money. This can be as simple as allowing them to watch an extra ten minutes’ television for every pound saved into their piggy bank from their pocket money.

  • Assign a monetary value to everyday chores

Giving your child chores, such as walking the dog (if they are old enough) or taking out the rubbish, is a great way to teach them that money is earned. This is also the perfect opportunity to encourage a healthy work ethic! The more difficult or time-consuming the task, the more valuable to them it should be, and you can offer some ‘additional tasks’ on top of their usual chores to give them options to earn more money.

What savings options are there for my child?

Only 52% of parents say they discuss money matters with their children, but setting up a savings account with your child is a great way to prepare them for the future.

When it comes to young savers, setting up an account has both financial and educational benefits. You can use a savings account to show your child how physical money is deposited. It’s also helpful to take your child shopping to spend money, and later show them using electronic banking how the balance has depreciated.

At Newcastle Building Society, we offer several savings account options for children. These include:

From as little as £1, young savers will have a savings account into which to save their hard-earned pocket money! This is a great opportunity for children to take responsibility for their finances and, with penalty-free access to funds and a 1% bonus to reward regular saving, it’s a great starting point for your little saver.

Saving for your child’s future is so important, and this becomes even easier with our children’s ISA accounts which offer the great benefit of tax-free interest on the money you save.

The Newcastle Junior ISA or Big Little Junior ISA could be perfect to grow a nest egg for your child, which they can access once they turn 18. Take a look at the individual accounts pages for more details – or for more information on Cash ISAs, why not take a look at our Cash ISA Guide.

Whether you’re keen to get started saving for your child now or you’re just looking ahead for the future, we hope you’ve found this blog on saving for children useful. Should you have any questions about savings accounts with Newcastle Building Society, a member of staff would be happy to speak with you. Call us now on 0345 734 4345, or book an appointment at your local branch.