Why Your Child Needs a Savings Account: Building Strong Money Habits for Life
As parents, we all strive to equip our children with the tools they need for a successful future, teaching them to be kind, confident, and responsible. But what about fostering financial responsibility? One of the most effective ways to do this is by opening a savings account for your child.
At Prospera, we believe it’s never too early to start building healthy money habits and start your journey to prosperity. Whether your child is just learning to count coins or is already saving up for a new bike, having their own savings account can lay the foundation for a lifetime of financial confidence.
Why Start Young?
Research indicates that children begin to form money habits at a surprisingly young age. A study co-authored by Professor Scott Rick at the University of Michigan found that children as young as five already exhibit distinct emotional reactions to spending and saving money, which translate into real-life spending behaviors. Notably, these tendencies develop independently of parental behavior, highlighting the importance of early financial education.
We even hear from the Financial Literacy and Education Commission that financial education combined with a deposit account experience at an early age can shape a young person's financial identity, attitudes, and habits in a way that can last for a lifetime.
The Research Is Clear: Saving Early Pays Off
Several studies show that kids who have savings accounts are more likely to succeed financially as adults. Check them out!
- A study published in the Journal of Financial Counseling and Planning found that children with savings accounts in their own names were more likely to own credit cards and stocks as young adults, compared to those without such accounts. This suggests that early ownership of savings accounts can lead to greater financial engagement later in life.
- Research from the Midwestern Higher Education Compact indicates that children with savings designated for school had significantly higher math scores than their peers without such savings. This relationship was partly explained by the effects of children’s savings on their college expectations, suggesting that early savings can positively influence academic performance and aspirations.
- The U.S. Department of the Treasury reports that young children in elementary school benefit significantly from combined financial education and savings programs, regardless of parent education and income. These programs, which involve opening a savings account and regular bank visits, help children understand economic and financial concepts from a young age.
More Than Just a Piggy Bank
A savings account does more than store money. It introduces children to the basics of banking, like how interest works, how to read a statement, and the importance of keeping money safe. Plus, kids feel a sense of pride and ownership when they get their own account, especially if you make it a big milestone! Making their first deposit or watching their balance hit a savings goal are great milestones to celebrate.
At Prospera, our kids' savings accounts are designed just for young savers. With no monthly fees, competitive interest rates, and fun incentives to save, we make it easy for families to start strong.
How Parents Can Make It Fun
- Set a family savings goal such as saving for a vacation or a big outing.
- Offer matching contributions just like a 401(k), if they save $5, you match it with $5.
- Celebrate milestones with small rewards or recognition.
- Visit Prospera together so they can deposit money in person and ask questions.
Start Their Journey Today
Giving your child a savings account isn’t just about dollars and cents, it’s about helping them grow into capable, financially responsible adults. The earlier they start, the more confident they’ll feel navigating their financial future. Prospera is here to provide personal tailored guidance to help you, and your child prosper!
Stop by your local Prospera branch or visit us online to open a kids’ savings account today.