Dear Dr. Per Cap
What’s the best way to teach a young child how to manage money?
– Money Minded Mom
Dear Money Minded Mom
Earning an allowance, counting coins, and safeguarding a piggy bank are all great teachable financial moments. But I think opening a children savings account at a local bank offers the biggest bang for your buck – pun intended.
Research suggests that children with bank accounts do better in school and are more successful at managing money later in life than their peers without bank accounts. The earlier your child opens an account the better.
Coincidentally, many EBCI families have opened children’s savings accounts with assistance from Sequoyah Fund. In 2014 Sequoyah Fund launched the Kituwah Savings Program in partnership with New Kituwah Academy and First Citizens Bank of Cherokee. The program is a model in Indian Country for innovative and high impact financial education for Native Youth.
It works like this. First Citizens Bank tellers visit the elementary school on special days to take student deposits on site. Sequoyah Fund then matches the deposits, up to a set limit, with free seed money to encourage saving. Sequoyah Fund even offers prizes when students reach savings goals and staff members frequently visit the school to teach youth friendly money lessons. As of last spring more than 62 EBCI youth have participated in the program and collectively saved over $18,000 dollars. That’s real money laying a foundation for bright financial futures!
While the Kituwah Savings Program is currently on hold during the pandemic and only available to students at New Kituwah Academy, there’s no reason a family can’t open a children’s savings account on their own. Simply visit a bank of your choice and request a Uniform Transfer to Minors Act account. That’s UTMA for short. A special type of custodial account that allows a parent or guardian to manage the account until the child reaches a certain age, usually 18 or 21. The idea being that a responsible adult won’t let junior raid the account for a gummy bear fix or a shopping spree in the Walmart toy aisle. Believe me when I say a custodian’s role is not for the faint of heart. I know. We have a seven-year-old at home.
Enhance your children’s savings account experience by giving your daughter or son a small allowance. Then help them count up the cash, fill out deposit slips, and organize bank statements. The learning opportunities are endless all while developing sound financial habits and life skills.
We homeschool so the Kituwah Savings Program isn’t the right fit for our family. However, we opened a savings account for our daughter shortly after she was born. Fridays are fun days. First stop is at First Citizens Bank for a deposit followed by a McDonald’s Happy Meal. My daughter covers both from her allowance, but a couple weeks ago she tried to convince me to buy the Happy Meal with my own cash.
“My money misses me if I spend it all at once” she said. Yep, kids learn fast!
For more information about the Kituwah Savings Program contact Hope Huskey (hopehuskey@sequoyahfund.org).
Ask Dr. Per Cap – EBCI Money Smart is brought to you by Sequoyah Fund and Shawn Spruce Consulting. For more information, visit www.sequoyahfund.org. To send a question to Dr. Per Cap, email agoyopi@gmail.com.