Many parents are aware of the importance of managing personal finance in their own household. We plan, budget and make carefully considered purchases. But most of us forget that we learned these habits over many years from knowledge passed down to us by our parents, mentors and sometimes the hard way from the "school of experience".
This is why it is so important to pass down these learnings and our own successful savings and budgeting habits to our own children, to help them understand the benefit of saving and budgeting from an early age. There’s no better place to start than by opening your child’s first savings account, and setting up a savings plan for their future.
Setting Up a Savings Plan
The reality is – your children will be receiving money at a very early age. Whether they receive birthday money from relatives or weekly pocket money, it is important to teach them how to save their money and think ahead about what they will use their money for.
Setting up a savings plan for your kids is the best tool to use to teach them these valuable savings lessons. Not only will they have somewhere to save their pocket money, but they will also feel a great sense of independence and confidence from being trusted to manage their own money.
Opening Your Child’s First Savings Account
To open up your child’s first savings account, you will have to provide identification for your child – a birth certificate, passport, or a Medicare card will be sufficient. This identification is necessary to setup a First Saver account, which comes with the $2 junior membership to the Holiday Coast Credit Union.
If your child is 12 years old, they can with your agreement operate their First Saver account themselves. There is no account servicing or excess transaction fees for the First Saver account. Again with your agreement a child aged 12 or more can receive a debit card, an internet banking account and a mobile app to help them manage their account.
Setting Up a Trust For Your Child
There are many reasons to setup a trust for your child. Whether the money is used for higher education, a new car, or a deposit for their first home, in essence it is an investment in their future.
You as the parent will decide when this trust can be handed over to your child. Until then, it is your responsibility. You will be considered the trustee to your child’s trust, and it will be declared as a part of your income.
To setup a trust for your child, identification for both yourself and your child is needed. Remember, the money can be gifted at any stage, so it is important to consider when the right time to hand this trust over to your child will be.
For more help on setting up your child’s first account, call 1300 365 7 24, email ubelong.com.au or drop into a Holiday Coast branch near you.
This article provides general information only and should not be relied upon as financial product advice.