I am guilty of underestimating my kids and what they can do. I am not talking about physical things but rather their understanding (or ability to understand) concepts, like money. One of the biggest challenges, I found, as an adult is budgeting and money management. We are now actively giving the children more control over their money so that they can start to understand concepts like saving, buying and budgeting.
Setting up bank accounts helps with this in a more ordered way than just getting them to save money in their piggy banks. It is also a more realistic way for them to understand how money management works.
A bank account allows them to learn:
Where money comes from. How many of our kids have said to us “Just go get it from the ATM!”. Having a bank account with a bank card is the perfect way for them to realise that money doesn’t just come out of the ATM machine. They also learn that money is not infinite and that if they spend it all, there is no more until they get more.
Budgeting. Before my kids had bank accounts they would ask for random things without thinking about it. Now when we tell them they have their own money and can buy whatever they want, suddenly the Gloop is less important.
The costs involved with managing an account. Even though charges on kids accounts are often very low, their are often fees associated with the account.
About interest rates and how it affects the money they have.
As they get older they can compare interest rates and bank charges. They can then decisions based on their findings depending on what they are trying to do with their money.
The art of saving from a young age. The stats about the saving habits of South Africa are shocking, we do not save for rainy days! We are encouraging the kids to save as much as they can from now and make sure that when they do spend their money it is on something they really want. The ABSA MegaU account encourages this by rewarding children who keep a R300 balance in their account.
It is also a valuable way to teach children independence. They can walk into a store, decide what they want and pay using their card themselves.
If you are looking at opening a bank account for your children, check out the ABSA MegaU account. They have some great benefits and your child can download the MegaU app which allows them to access their money from their phone.
Disclaimer: This is a sponsored post