Creating a financial base for children at a young age is a great investment for their future! Putting money away for the child will help them greatly as they embark on their college career and further along into adulthood. As the child grows older, getting them involved in the saving process will educate them on the importance of good spending habits and savings practices. It teaches them valuable lessons about money and how money works. Here are some simple ways to kick-start a child’s finances:
- Open a savings account with a bank or other financial institution on behalf of the child. If possible, start the account when the child is just a baby. As time goes on, and the child is old enough to understand the concept, encourage them to deposit birthday or holiday money, such as checks, into the account for safekeeping.
- Implement a college savings plan. A 529 college savings plan allows parents to put money away tax-free for their children’s education. Savings in this type of account can be used at any accredited college in the United States for undergraduate or graduate studies.
- Create a jar or piggy bank for storing any money the child wishes to save in their presence. Sometimes the child will want to watch the money accumulate or feel how heavy a piggy bank will become over time, driving them to want to save more and more.
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