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It is helpful for the child to be involved in their savings program. Putting money into an account for them builds their savings, but doesn't necessarily build the savings habit. If they put the money into the ATM, or go into the bank themselves, the experience is personal and concrete and thus easier to remember. Both gifts and earned money can have a role in the child's savings. Earning money gives more appreciation of its value. Gifts can give a significant boost to well being. Older children may be able to earn money from jobs. Younger ones may receive an allowance or earn money by doing chores. Younger kids should start off with concrete savings. Putting cash into a toy bank fits well with their mode of thinking. Older ones should probably have a bank account, though they may wish to retain the piggy bank as well. Minors cannot generally have their own bank account. Instead, they can have a joint account with an adult as the other owner. Clearly a parent is ideal for this, but any responsible adult will do. Even though both parties legally own the money, it should generally be treated as if it belongs to the child. The Uniform Transfers To Minors Act (UTMA) makes it possible to create a custodial account for the child. The child owns the account, but cannot access it until the reach a specific age. The details differ by state. There is an adult custodian who manages the money until the child is old enough. Sometimes establishing a habit of saving for children is very easy to do, as many kids have a natural savings instinct that just needs some nurturing. Others may not have the required self discipline. These are the ones who need the most adult encouragement.
Article Source: http://www.bharatbhasha.net Article Url: http://www.bharatbhasha.net/kids.php/300024 Article Added on Wednesday, June 1, 2011 LD | ||||||||
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