We often hear that our children are our greatest asset, the door to the future. How can we help them build confidence in their financial future? Will they be equipped to deal with the financial demands of the 21st century?
One good answer is a credit union share savings account. By encouraging regular savings at True North, you prepare your kids to meet the demands of an increasingly complex financial world. A regular savings program helps both teenagers and younger children understand the basics of personal finance and the importance of building sound money management habits.
It demonstrates the power of savings to help youngsters reach their goals. It prepares them for the day when they'll manage their own money.
Even very young children can grasp the fundamentals of saving, and become excited about having their very own savings program. Pilot programs in elementary schools and even preschool programs, including one operated jointly by CEDC Federal Credit Union and Nassau County Head Start Program, Hempstead, N.Y., prove that children become excited about having and contributing to savings accounts.
As children grow and acquire allowances, after-school jobs, and other income sources, they see those savings add up--and their pride and independence grow too.
Recent studies by sponsors as varied as Teen Research Unltd., Northbrook, Ill., and the U.S. Labor Department indicate that America's children receive more than $14 billion a year from allowances, odd jobs, and gifts. Their income averages $4.87 a week, or about $250 a year. The typical 12-year-old spends more that $7 each week. And, children save $6 billion a year, or more than 40% of their income.
Perhaps the most important reason to start saving early and regularly is that saving helps young people develop the skills they'll need to be intelligent credit consumers. A record of regular savings tells the credit union this young person can handle the responsibility of repaying that first loan for a car, college, or educational travel.
Having demonstrated the ability to stick to a planned program, loan officers are more likely to approve the loan application. In this situation, the share savings account does double duty, because the young borrower--lacking any credit history--can use it as security for the loan.
So don't wait. Help your children open share savings accounts and encourage them to add to them each week or month.
Remember, it's not the amount of the deposit that counts: It's establishing sound, lifelong financial habits that will make more complex financial transactions later on easier, and more comfortable. See True North now to start your kids on the road to confident money management.