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3 Advantages to Youth Savings

Posted by Adam Rossi on Sep 30, 2019 11:00:00 AM

If you have young kids, then you’ve probably experienced some feelings of anxiety over both the future of their finances and the future of their financial knowledge at least once or twice. Youth education is not usually especially focused on teaching kids about how financial systems work or teaching about handling and managing money in the future. This responsibility falls upon the parents, not schoolteachers, and with life seemingly becoming busier and busier, it’s always a benefit to have some tools that will help you better educate your child about money. That’s where a youth savings account comes in; after all, what better way to learn than through experience? 


  1. It’s Like a Piggy Bank - Only Better

    One of the classic ways of teaching children about saving money is the piggy bank: your child wants something that’s relatively expensive, so you tell them to start saving money so that they can actually afford the item themselves (probably with some help from you, to be fair).

    While the piggy bank acts as a good vehicle to teach about basic savings, an actual youth savings account with a credit union can teach them both the value of traditional saving, and act as an early introduction to the concept of interest and APY. This might not intuitively make sense to a child, particularly if they are very young, but the earlier you can start to introduce it, the more they will be able to grasp it later on. Think of it as a teaching opportunity!

  2. It Acts as an Introduction to Financial Responsibility

    While your child may initially start saving with a particular item in mind, that could very well change as time goes on. They may decide that they want to buy something different and less expensive instead. This is yet another opportunity to teach them something - this time about financial responsibility. If they choose to buy the cheaper item now, they won’t be able to get the larger item for a longer time, because buying the action figure will dig into what they have saved.

    Whether you let them dip into their savings or exclude them from doing so, it allows them a chance to start building a sense of financial responsibility. The consequences aren’t going to be as substantial as it is for an adult, of course, but buying that action figure or doll today means that they won’t be able to buy that bicycle as soon as they had expected, and that’s a valuable money lesson in itself.

  3. It Can Introduce Cost to a Child

    One thing costing more than another might seem rudimentary to an adult, but understanding cost is something that has to be learned. Youth savings can build an early understanding of what cost actually means. Let’s go back to the doll vs. bike scenario: a child is probably not going to understand why you buying them a small toy is any different than you buying them a new bicycle; all they know is that they want those things.

    However, if you establish something like a consistent weekly allowance - let’s say 5 dollars a week - they will start to understand that it takes longer to get the bike than the doll, even though their allowance is always the same. 

Where Can I Open a Youth Savings Account? 

HRCCU offers a youth savings account for children under 15, and the required monthly balance starts at just five dollars! With a .10% interest rate, our youth account gives the same rate for many of our savings accounts, but at only a tiny fraction of the usual balance minimums. We want to be a guiding hand in your child’s financial development, and considering both the growth rate and the educational opportunity that a youth savings account provides, we believe we’re doing just that! 

Looking for some tips on back to school savings? Read our blog, “5 Back to School Savings Tips for Parents”!

Topics: Savings Account, youth savings